Friday, May 18, 2001

SENATE JOURNAL

SEVENTY-SIXTH DAY

Friday, May 18, 2001

PROCEEDINGS

The Senate met at 9:00 a.m. pursuant to adjournment and was called to order by the President.

The roll was called and the following Senators were present: Armbrister, Barrientos, Bernsen, Bivins, Brown, Cain, Carona, Duncan, Ellis, Fraser, Gallegos, Harris, Haywood, Jackson, Lindsay, Lucio, Madla, Moncrief, Nelson, Ogden, Shapiro, Shapleigh, Sibley, Staples, Truan, Van de Putte, Wentworth, West, Whitmire, Zaffirini, Mr. President.

The President announced that a quorum of the Senate was present.

Senate Doorkeeper Don Long offered the invocation as follows:

Almighty Lord of all, we beseech You this day to guide every word, thought, and action in this Texas Senate Chamber. Dispel whatever spirit of discord may here arise. Enrich every Senator's heart with that most excellent gift of charity, so that all acts may be full of the spirit of kindness and forbearance, one toward another.

Give each Senator the courage to put into practice those immortal words of Abraham Lincoln in his second inaugural address on March 4, 1865: "With malice toward none, with charity for all, with firmness in the right as God gives us to see the right, let us strive on to finish the work we are in." God bless each and every one in this chamber. Amen.

On motion of Senator Truan and by unanimous consent, the reading of the Journal of the proceedings of yesterday was dispensed with and the Journal was approved.

MESSAGE FROM THE GOVERNOR

The following Message from the Governor was read and was referred to the Committee on Nominations:

Austin, Texas

May 17, 2001

TO THE SENATE OF THE SEVENTY-SEVENTH LEGISLATURE, REGULAR SESSION:

On January 30, 2001, I submitted the name of Douglas A. Schwartz of El Paso for appointment to the Real Estate Research Advisory Committee for a term to expire January 31, 2005.

77th Legislature — Regular Session 76th Day

I hereby withdraw his nomination for this committee and request that the Senate return this appointment to me.

Respectfully submitted,

/s/Rick Perry

Governor

MESSAGE FROM THE GOVERNOR

The following Message from the Governor was read and was filed with the Secretary of the Senate:

OFFICIAL MEMORANDUM

STATE OF TEXAS

OFFICE OF THE GOVERNOR

May 18, 2001

Austin, Texas

MESSAGE

Article 4, Section 14, of the Texas Constitution directs and regulates when and how the Governor can approve or disapprove any bill passed by both houses of the Legislature.

The Legislature has passed HCR 291 requesting that I return HB 2218 by Rangel to the Senate for further consideration. In this instance, I have taken no formal action on HB 2218 and I am agreeing to the request of the Legislature.

While under no obligation to comply with this request, and pursuant to established case law, I hereby return the enrolled copy of HB 2218 with this message to the Senate for further consideration.

IN TESTIMONY WHEREOF, I have signed my name officially and caused the Seal of the State to be affixed hereto at Austin, this 18th day of May, 2001.

/s/Rick Perry

Governor of Texas

ATTESTED BY:

/s/Henry Cuellar, Ph.D.

Secretary of State

MESSAGE FROM THE HOUSE

HOUSE CHAMBER

Austin, Texas

May 18, 2001

The Honorable President of the Senate

Senate Chamber

Austin, Texas

Mr. President:

I am directed by the House to inform the Senate that the House has taken the following action:

Friday, May 18, 2001

SENATE JOURNAL

THE HOUSE HAS PASSED THE FOLLOWING MEASURES:

HCR 293, Congratulating Stephen Arthur and Eugenia Marie Gonzalez of Pflugerville on the birth of their son, Christian Alexander Gonzalez.

SB 4, Relating to the administration and use of the Texas Mobility Fund and the issuance of obligations for financing the construction, reconstruction, acquisition, and expansion of state highways and other mobility projects.

(Committee Substitute/Amended)

SB 7, Relating to the period during which a person arrested is required to be taken before a magistrate and to the appointment and compensation of counsel to represent indigent persons accused of crime.

(Committee Substitute/Amended)

SB 45, Relating to hardship exemptions from time limits under the temporary assistance for needy families program.

(Committee Substitute)

SB 133, Relating to the admissibility in a criminal trial of race or ethnicity as a predictor of future criminal behavior.

SB 214, Relating to the statute of limitations for the presentation of certain felony indictments.

(Amended)

SB 233, Relating to parental liability for the conduct of a child.

SB 314, Relating to the continuation and functions of the Texas Department of Banking and the regulation of certain financial institutions and businesses; providing an administrative penalty.

(Committee Substitute/Amended)

SB 328, Relating to the statute of limitations for purposes of prosecuting certain offenses involving injury to a child, elderly individual, or disabled individual.

SB 352, Relating to the collection of solid waste disposal service fees by a county or by certain public or private entities contracting with a county.

(Amended)

SB 354, Relating to the powers of a local government corporation.

(Committee Substitute/Amended)

SB 356, Relating to performance measures for innovative regulatory programs implemented by the Texas Natural Resource Conservation Commission.

SB 367, Relating to ensuring an appropriate care setting for a person with a disability.

(Amended)

SB 437, Relating to the offense of theft of service.

(Amended)

SB 466, Relating to a specialty insurance agent license for persons who sell certain telecommunications equipment.

SB 516, Relating to creating the rural physician relief program.

(Amended)

77th Legislature — Regular Session 76th Day

SB 518, Relating to public school counselors.

(Amended)

SB 563, Relating to the protection of the interest of certain innocent property owners in a criminal asset forfeiture proceeding.

(Amended)

SB 609, Relating to the compensation received by peace officers commissioned by the Department of Public Safety who are required to work on certain holidays.

(Committee Substitute)

SB 616, Relating to the establishment of a medical assistance pilot program for the management of children's asthma.

(Amended)

SB 620, Relating to extension of restrictions imposing regular assessments in certain residential real estate subdivisions.

SB 697, Relating to the regulation of the practice of professional engineering.

(Committee Substitute/Amended)

SB 700, Relating to the suspension of a license for failure to comply with the terms of a court order providing for the possession of or access to a child.

SB 826, Relating to the location of public education schools, programs, and classes.

(Amended)

SB 935, Relating to engaging in the business of making, negotiating, or transacting certain consumer loans on a financial institution's behalf.

SB 1205, Relating to the exemption of certain business enterprises and courses of instruction from proprietary school certification.

(Committee Substitute)

SB 1210, Relating to certain attorneys and law clerks employed by a court.

(Committee Substitute)

SB 1446, Relating to severance payments to superintendents of independent school districts.

SB 1449, Relating to the execution of bonds and the sale of loans by the Veterans' Land Board.

SJR 47, Proposing a constitutional amendment to authorize the legislature to exempt from ad valorem taxation raw cocoa and green coffee that is held in Harris County.

Respectfully,

/s/Sharon Carter, Chief Clerk

House of Representatives

PHYSICIAN OF THE DAY

Senator Van de Putte was recognized and presented Dr. Miguel Ramirez of San Antonio as the Physician of the Day.

The Senate welcomed Dr. Ramirez and thanked him for his participation in the Physician of the Day program sponsored by the Texas Academy of Family Physicians.

Friday, May 18, 2001

SENATE JOURNAL

SENATE CONCURRENT RESOLUTION 61

The President laid before the Senate the following resolution:

WHEREAS, The Legislature of the State of Texas is pleased to recognize Lockheed Martin for the many valuable contributions it has made to the people of this state and to express its unqualified support for future plans to assemble the Joint Strike Fighter at Lockheed Martin Aeronautics in Fort Worth; and

WHEREAS, Lockheed Martin's Texas companies set the standard for excellence in aircraft, missiles, space operations and launch vehicles, information systems, environmental remediation, logistics management, training and technical services, and state and local government services; and

WHEREAS, Lockheed Martin makes vital contributions to the economic well-being of the State of Texas, operating 13 facilities with $1.2 billion in payroll being distributed to its 19,000 Texas employees; additionally, its business operations generate billions of dollars of revenue for nearly 2,700 Texas suppliers, including 91 small, historically underutilized, and women-owned businesses; and

WHEREAS, An outstanding corporate citizen of Texas, Lockheed Martin has contributed more than $3 million in charitable donations, plus countless hours of employee volunteer time to state and local educational, cultural, and service organizations; and

WHEREAS, Lockheed Martin Aeronautics Company, located in Fort Worth, Texas, is celebrating its 60th anniversary in 2001 as the premiere military aircraft manufacturer in the world; over the course of its history in Fort Worth, Lockheed Martin Aeronautics has produced 3,120 F-16s, 562 F-111s, 116 B-58s, 385 B-36s, 124 B-32s, and 3,034 B-24s, a total of 7,341 military aircraft; and

WHEREAS, A fifth generation fighter aircraft for all three military services known as the Joint Strike Fighter will replace the F-15s, F-16s, A-10s, AV-8s, and F-18s in service; the Department of Defense is scheduled to purchase 3,000 of the aircraft, while the international market could be an additional 3,000; and

WHEREAS, Production of the Joint Strike Fighter is expected to further the United States' dominance of the world export fighter market for the next 30 years, continuing the legacy of the F-16 Fighting Falcon, the greatest export defense success of this generation; and

WHEREAS, The production of the Joint Strike Fighter, which will generate $200 billion in sales, will be the last major fighter contract awarded until the year 2040; and

WHEREAS, The assembly of the Joint Strike Fighter will begin in 2008 under the existing timetable, and the project would extend the life of the 60-year-old Fort Worth plant, as the production of the F-16 Fighting Falcon will conclude with the close of this decade; and

WHEREAS, The Joint Strike Fighter project could potentially create as many as 2,000 engineering, manufacturing, and development jobs, 8,000 full production jobs, and 40,000 jobs for subcontractors; and

WHEREAS, Among those hoping to assemble the Joint Strike Fighter are companies with sites in Missouri and California; the Secretary of Defense has been requested by Congress to submit a report on production alternatives for the Joint Strike Fighter Program and the effects on the tactical fighter aircraft industrial base of each alternative considered; and

77th Legislature — Regular Session 76th Day

WHEREAS, California's power shortages will not be rectified for some time to come, rendering it unable to guarantee adequate supplies of affordable electricity for production, while the State of Texas should have over 20 percent excess electricity capacity in the future due to power plant construction and local availability of natural gas combined with a streamlined application process for additional power plants; and

WHEREAS, Since 1941, the Lockheed Martin Aeronautics Company in Fort Worth has provided hundreds of thousands of Texans with quality, well-paying employment; a company that has earned an unequalled reputation for military aircraft construction, Lockheed Martin Aeronautics Company will continue to be the premiere fighter aircraft manufacturer in the world, guaranteeing our nation's defense and continuing the proud heritage of military aviation in Texas; now, therefore, be it

RESOLVED, That the 77th Legislature of the State of Texas hereby fully support the selection of Lockheed Martin Aeronautics in Fort Worth as the site for the Joint Strike Fighter construction program; and, be it further

RESOLVED, That a copy of this resolution be prepared to express the admiration and high regard the Texas Legislature holds for Lockheed Martin.

MONCRIEF

The resolution was read.

On motion of Senator Truan and by unanimous consent, the names of the Lieutenant Governor and Senators were added to the resolution as signers thereof.

On motion of Senator Moncrief and by unanimous consent, the resolution was considered immediately and was adopted by a viva voce vote.

GUESTS PRESENTED

Senator Moncrief was recognized and introduced to the Senate Dwain Mayfield, Vice-president of Strategic Initiatives; Eric Fox, Senior Director of Governmental Affairs; and Emily Moss, Director of Governmental Affairs; all of Lockheed Martin Aeronautics Company in Fort Worth.

The Senate welcomed its guests.

SENATE RESOLUTION 1100

Senator Lucio offered the following resolution:

WHEREAS, Every session for the past 24 years, members of the Texas Senate have found common ground in the conviction that they were privileged to work with the finest legislative secretary in the entire United States of America, and when Betty King, secretary of this chamber, retires for good at the end of the 77th Regular Session, she will take with her the enduring gratitude of a host of Texas senators and leave behind a legacy of service, dedication, and friendship that is already legendary far beyond the Texas Capitol; and

WHEREAS, Introduced to the legislature at the age of 14, when she served as an honorary page, Mrs. King returned to work for the senate after attending The University of Texas at Austin; she gained increasing experience as a staff member for various committees, for Senator Ottis Locke, and for President Pro Tempore Culp Krueger, and became assistant journal clerk in 1967; in 1973 she was elevated to the post of journal clerk, and in 1977 to the office of secretary of the senate, the highest administrative position in the chamber; and

Friday, May 18, 2001

SENATE JOURNAL

WHEREAS, After serving in that capacity with unexampled graciousness, efficiency, and diplomacy in 12 successive legislatures, the longest term of any person to hold the office, Mrs. King announced her decision to retire at the end of 2000; though her retirement was more than well-earned, the prospect met with such universal dismay that she ultimately acceded to pleas that she continue for still one more session; and

WHEREAS, On April 26, 2001, the Texas Senate honored Mrs. King with the passage of Senate Resolution 590, which testified to her illustrious record of service, both to this chamber and to many civic, humanitarian, and cultural organizations; the resolution also provided that the Lieutenant Governor's Committee Room should be renamed the Betty King Committee Room, in recognition of all she has done for the senate and for its members "as friend, confidante, and mentor"; and

WHEREAS, Betty King's contributions to the work of the Texas Senate have truly been immeasurable, and her friendship one of the surest and brightest lights in this legislative arena; now, therefore, be it

RESOLVED, That the Senate of the 77th Texas Legislature hereby honor Betty King for her more than 53 years of exemplary public service and for the model she has set of dignity, honor, professionalism, and humanity in discharging the responsibilities of the office of secretary of the senate; and, be it further

RESOLVED, That the Betty King Public Service Award be established, to be conferred before sine die of every regular legislative session, beginning with the 77th Legislature, and to be bestowed on one legislative and one administrative employee of the Texas Senate who exhibit exceptional commitment and dedication to this chamber; and, be it further

RESOLVED, That recipients of the award be chosen by the Betty King Public Service Award Commission, to be composed of the lieutenant governor, the president pro tempore, the chairman of the Senate Administration Committee, the secretary of the senate, and the senate sergeant at arms; and, be it further

RESOLVED, That an official copy of this resolution be prepared for Betty King as an expression of highest esteem and affection by the Texas Senate.

LUCIO

BROWN

HARRIS

MADLA

The resolution was read.

On motion of Senator Truan and by unanimous consent, the names of the Lieutenant Governor and Senators were added to the resolution as signers thereof.

On motion of Senator Lucio, the resolution was adopted by a rising vote of the Senate.

BILLS AND RESOLUTIONS SIGNED

The President announced the signing of the following enrolled bills and resolutions in the presence of the Senate after the captions had been read:

SB 12, SB 140, SB 148, SB 170, SB 236, SB 274, SB 275, SB 285, SB 368, SB 429, SB 433, SB 453, SB 477, SB 535, SB 542, SB 572, SB 584, SB 587, SB 591, SB 596, SB 647, SB 649, SB 651, SB 673, SB 702, SB 707, SB 714,

77th Legislature — Regular Session 76th Day

SB 757, SB 772, SB 790, SB 850, SB 873, SB 877, SB 904, SB 940, SB 962, SB 990, SB 1002, SB 1015, SB 1043, SB 1057, SB 1061, SB 1146, SB 1207, SB 1213, SB 1262, SB 1300, SB 1304, SB 1376, SB 1394, SB 1491, SB 1539, SB 1561, SB 1563, SB 1588, SB 1667, SB 1671, SB 1707, SB 1710, SB 1735, SB 1772, SB 1799, SB 1806, SB 1810, SB 1811, SB 1814, SCR 22, SCR 23, SCR 50, SCR 64.

SENATE RESOLUTION 842

Senator Truan offered the following resolution:

WHEREAS, The Texas Senate takes pride in joining the citizens of Texas and of the United States in recognizing their incalculable debt to the nation's military personnel who have served valiantly throughout the country's history; and

WHEREAS, The efforts and sacrifices of these brave military people have secured the blessings of liberty for countless Americans over many generations, and the month of May is strongly associated with the remembrance of these courageous men and women; and

WHEREAS, A special day was selected after World War I to pay tribute to all Americans who gave their lives for their country; each year, citizens of Texas and the United States have gathered on Memorial Day to recognize the noble ideals of duty, honor, and patriotism; and

WHEREAS, Charged with maintaining the nation's security and prepared to do their utmost to defend their country and the cause of freedom, the nation's men and women in the armed services serve at their posts every day of the year, at home and throughout the world; and

WHEREAS, Having long distinguished themselves in the annals of the armed forces, Texans and other fellow citizens of the United States of America continue to uphold the tradition of gallantry and integrity established by the legions who have preceded them; and

WHEREAS, Consequently, it is fitting that all citizens pay tribute to the country's past and present members of the United States military services; now, therefore, be it

RESOLVED, That the Senate of the State of Texas, 77th Legislature, hereby recognize May, 2001, as Remembrance, Armed Forces, and Veteran Appreciation Month in the State of Texas and urge all Texans to honor our country's military personnel for their vital contributions to freedom and democracy; and, be it further

RESOLVED, That a copy of this Resolution be prepared for the Military Order of the Purple Heart of Texas as an expression of the highest esteem from the Texas Senate.

The resolution was again read.

On motion of Senator Barrientos and by unanimous consent, the names of the Lieutenant Governor and Senators were added to the resolution as signers thereof.

The resolution was previously adopted on Tuesday, May 1, 2001.

GUESTS PRESENTED

Senator Truan was recognized and introduced to the Senate Rufus Dye and Bob Lichtenberger.

The Senate welcomed its guests.

Friday, May 18, 2001

SENATE JOURNAL

(Senator Staples in Chair)

HOUSE CONCURRENT RESOLUTION 284

The Presiding Officer laid before the Senate the following resolution:

HCR 284, Instructing the enrolling clerk of the house to make technical corrections in HB 1245.

HARRIS

The resolution was read.

Senator Harris offered the following amendment to the resolution:

Floor Amendment No. 1

Amend HCR 284, on page 1, line 24, by striking "on or after" and substituting "before, on, or after".

The amendment was read and was adopted by a viva voce vote.

HCR 284 as amended was considered immediately and was adopted by a viva voce vote.

(President in Chair)

SENATE BILL 1358 WITH HOUSE AMENDMENTS

Senator Armbrister called SB 1358 from the President's table for consideration of the House amendments to the bill.

The President laid the bill and the House amendments before the Senate.

Floor Amendment No. 1

Amend SB 1358 in SECTION 5 of the bill by striking Section 901.006, Occupations Code, as amended by the bill (house committee printing, page 9, lines 20-24).

Floor Amendment No. 1 on Third Reading

Amend SB 1358 on third reading, in SECTION 41 of the bill, following Subsection (f) of that section (House Committee Printing page 51, after line 25), by adding the following:

(g)  The changes in law made by this Act are not intended to authorize the practice of law by a person who is not an attorney licensed to practice law in this state.

The amendments were read.

On motion of Senator Armbrister, the Senate concurred in the House amendments to SB 1358 by a viva voce vote.

SENATE BILL 575 WITH HOUSE AMENDMENT

Senator Staples called SB 575 from the President's table for consideration of the House amendment to the bill.

The President laid the bill and the House amendment before the Senate.

77th Legislature — Regular Session 76th Day

Amendment

Amend SB 575 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to applicability of the Texas Youth Camp Safety and Health Act to a private or independent institution of higher education.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Chapter 141, Health and Safety Code, is amended by adding Section 141.0021 to read as follows:

Sec. 141.0021.  EXEMPTION. This chapter does not apply to a facility or program operated by or on the campus of an institution of higher education or a private or independent institution of higher education as defined by Section 61.003, Education Code.

SECTION 2.  This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2001.

The amendment was read.

Senator Staples moved to concur in the House amendment to SB 575.

The motion prevailed by the following vote: Yeas 30, Nays 0, Present-not voting 1.

Present-not voting: Mr. President.

SENATE BILL 1318 WITH HOUSE AMENDMENT

Senator Staples called SB 1318 from the President's table for consideration of the House amendment to the bill.

The President laid the bill and the House amendment before the Senate.

Amendment

Amend SB 1318 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the regulation of certain health spas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Section 702.253, Occupations Code, is amended to read as follows:

Sec. 702.253. ADJUDICATION ON PRO RATA BASIS. [(a) ]  If the total amount of actual financial losses computed under Section 702.252 for all claims filed under Section 702.251 exceeds the amount of available security, the secretary of state shall reduce the amount of each recovery under Section 702.252 on a pro rata basis and shall compute the amount of each recovery by:

(1)  dividing the amount of available security by the total amount of actual financial losses computed under Section 702.252 for all claims; and

(2)  multiplying the results computed under Subdivision (1) by the amount of the recovery.

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[(b)  For purposes of this section, the amount of available security is computed by subtracting the costs incurred in publishing notice under Section 702.452 from the amount of the security filed or posted for the health spa. ]

SECTION 2.  Section 702.254, Occupations Code, is amended to read as follows:

Sec. 702.254.  CLAIM BARRED. The secretary of state may not consider a claim filed under Section 702.251 if the claim is received later than the 90th day after the [first ] date notice is first posted [published ] under Section 702.452.

SECTION 3.  Section 702.452, Occupations Code, is amended to read as follows:

Sec. 702.452. NOTICE OF CLOSED HEALTH SPA. (a) Not later than the third [45th ] day after the date [the secretary of state discovers that ] a health spa is closed, the certificate holder [secretary ] shall contemporaneously:

(1)  post, at the health spa location [publish for two consecutive Saturdays and Sundays in a newspaper of general circulation in the county in which the health spa is located, or the county nearest to the location of the health spa ], a notice stating:

(A)  that the health spa is closed;

(B)  that a member of the health spa may, not later than the 90th day after the date the [first ] notice is first posted [published ], file with the secretary of state a claim to recover actual financial loss suffered by the member as a result of the health spa closing; and

(C)  the procedures for perfecting a security claim; and

(2)  notify the secretary of state of the health spa closing and the date that the notice was first posted.

(b)  The notice posted under Subsection (a)(1) must be:

(1)  at least 8-1/2 by 11 inches in size;

(2)  posted in a place that is readily accessible to the general public during the former operating hours of the health spa; and

(3)  posted continuously for at least 14 days.

(c)  If the certificate holder fails to post the notice required by Subsection (a)(1) within the time specified, the secretary of state, not later than the 30th day after the date the secretary discovers that a health spa is closed, shall post the notice required under Subsection (a)(1).

(d)  After receiving a notice under Subsection (a)(2) or otherwise discovering that a health spa is closed, the secretary of state shall post on the secretary of state's Internet website a notice containing the information specified in Subsection (a)(1). The notice must be posted continuously for at least 30 days.

(e)  The secretary of state shall, not later than the 10th day after the date the secretary receives notice or otherwise discovers that a health spa is closed, notify the appropriate surety company or obligor of the administrative proceedings pending under Subsection (a)(1) [Subdivision (1) ].

SECTION 4.  Section 702.453, Occupations Code, is repealed.

SECTION 5.  This Act takes effect September 1, 2001, and applies only to a health spa that closes on or after that date. A health spa that closes before that date is governed by the law in effect immediately before September 1, 2001, and the former law is continued in effect for that purpose.

The amendment was read.

On motion of Senator Staples, the Senate concurred in the House amendment to SB 1318 by a viva voce vote.

77th Legislature — Regular Session 76th Day

SENATE BILL 789 WITH HOUSE AMENDMENTS

Senator Moncrief called SB 789 from the President's table for consideration of the House amendments to the bill.

The President laid the bill and the House amendments before the Senate.

Amendment

Amend SB 789 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the regulation and reimbursement of telemedicine medical services.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Section 531.0216, Government Code, is amended to read as follows:

Sec. 531.0216.  PARTICIPATION AND REIMBURSEMENT OF TELEMEDICINE MEDICAL SERVICE PROVIDERS UNDER MEDICAID. (a) The commission by rule shall develop and implement a system to reimburse providers of services under the state Medicaid program for services performed using telemedicine medical services.

(b)  In developing the system, the commission by rule shall:

(1)  review programs and pilot projects in other states to determine the most effective method for reimbursement;

(2)  establish billing codes and a fee schedule for services; [and ]

(3)  provide for an approval process before a provider can receive reimbursement for services;

(4)  consult with the Texas Department of Health and the telemedicine advisory committee to develop a procedure to deny reimbursement for a medical service that, based on credible clinical evidence, is shown to be medically inappropriate;

(5)  establish pilot programs in designated areas of this state under which the commission, in administering government-funded health programs, may reimburse a health professional participating in the pilot program for telehealth services authorized under the licensing law applicable to the health professional; and

(6)  establish a separate provider identifier for telemedicine medical services providers.

(c)  The commission shall encourage physicians, teaching hospitals, small rural hospitals, federally qualified health centers, and state-owned health care facilities to participate as telemedicine medical service providers in the health care delivery system. The commission may not require that a service be provided to a patient through telemedicine medical services when the service can reasonably be provided by a physician through a face-to-face consultation with the patient in the community in which the patient resides or works. This subsection does not prohibit the authorization of the provision of any service to a patient through telemedicine medical services at the patient's request.

(d)  Subject to Section 153.004, Occupations Code [5.11, Medical Practice Act (Article 4495b, Vernon's Texas Civil Statutes) ], the commission may adopt rules as necessary to implement this section.

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(e)  The commission may not reimburse a health care facility for telemedicine medical services provided to a Medicaid recipient unless the facility complies with the minimum standards adopted under Section 531.02161.

(f)  Not later than December 1 of each even-numbered year, the commission shall report to the speaker of the house of representatives and the lieutenant governor on the effects of telemedicine medical services on the Medicaid program in the state, including the number of physicians and health professionals using telemedicine medical services, the geographic and demographic disposition of the physicians and health professionals, the number of patients receiving telemedicine medical services, the types of services being provided, and the cost of utilization of telemedicine medical services to the program.

(g)  In this section:

(1)  "Telehealth service" has the meaning assigned by Section 57.042, Utilities Code.

(2)  "Telemedicine medical service"[, "telemedicine" ] has the meaning assigned by Section 57.042, Utilities Code.

SECTION 2.  Subchapter B, Chapter 531, Government Code, is amended by adding Section 531.02161 to read as follows:

Sec. 531.02161.  TELEMEDICINE TECHNOLOGY STANDARDS. (a) In this section, "telemedicine medical service" has the meaning assigned by Section 57.042, Utilities Code.

(b)  The commission and the Telecommunications Infrastructure Fund Board by joint rule shall establish and adopt minimum standards for an operating system used in the provision of telemedicine medical services by a health care facility participating in the state Medicaid program, including standards for electronic transmission, software, and hardware.

(c)  In developing standards under this section, the commission and the Telecommunications Infrastructure Fund Board shall address:

(1)  authentication and authorization of users;

(2)  authentication of the origin of information;

(3)  the prevention of unauthorized access to the system or information;

(4)  system security, including the integrity of information that is collected, program integrity, and system integrity;

(5)  maintenance of documentation about system and information usage;

(6)  information storage, maintenance, and transmission; and

(7)  synchronization and verification of patient profile data.

SECTION 3.  Section 531.0217, Government Code, is amended to read as follows:

Sec. 531.0217.  REIMBURSEMENT FOR CERTAIN MEDICAL CONSULTATIONS. (a) In this section:

(1)  "Health professional" means:

(A)  a physician;

(B)  an individual who is:

(i)  licensed or certified in this state to perform health care services; and

(ii)  authorized to assist a physician in providing telemedicine medical services that are delegated and supervised by the physician; or

77th Legislature — Regular Session 76th Day

(C)  a licensed or certified health professional acting within the scope of the license or certification who does not perform a telemedicine medical service [an advanced nurse practitioner, an allied health professional, a mental health professional, a physician, or a physician assistant who is licensed in this state ].

(2)  "Physician" means a person licensed to practice medicine in this state under Subtitle B, Title 3, Occupations Code. ["Rural county" means a county that:

[(A)  has a population of 50,000 or less; or

[(B)  contains an area that was not designated as an urban area by the United States Bureau of the Census according to the 1990 federal census and does not have within the boundaries of the county a hospital that:

[(i)  is licensed under Chapter 241, Health and Safety Code; and

[(ii)  has more than 100 beds. ]

(3)  "Telehealth service" has the meaning assigned by Section 57.042, Utilities Code.

(4)  "Telemedicine medical service" has the meaning assigned by Section 57.042, Utilities Code. ["Rural health facility" means a health facility that is located in a rural county and at least 30 miles from any accredited medical school or any teaching hospital affiliated with an accredited medical school and that is:

[(A)  a licensed, nonprofit hospital;

[(B)  a health clinic that is affiliated with:

[(i)  an accredited medical school;

[(ii)  a teaching hospital that is affiliated with an accredited medical school;

[(iii)  a hospital described by Paragraph (C); or

[(iv)  a federally qualified health center, as defined by 42 U.S.C. Section 1396d(l)(2)(B), as amended; or

[(C)  a hospital that:

[(i)  is licensed under Chapter 241, Health and Safety Code;

[(ii)  is owned or operated by a municipality, county, hospital district, or hospital authority; and

[(iii)  provides inpatient or outpatient services.

[(4)  "Telemedical consultation" means a medical consultation for purposes of patient diagnosis or treatment that requires the use of advanced telecommunications technology, including:

[(A)  compressed digital interactive video, audio, or data transmission;

[(B)  clinical data transmission via computer imaging for teleradiology or telepathology; and

[(C)  other technology that facilitates access in rural counties to health care services or medical specialty expertise. ]

(b)  The commission by rule shall require each health and human services agency that administers a part of the Medicaid program to provide Medicaid reimbursement for a telemedicine medical service initiated or [telemedical consultation ] provided by a physician [licensed in this state who practices in:

[(1)  a rural health facility;

[(2)  an accredited medical school; or

[(3)  a teaching hospital that is affiliated with an accredited medical school ].

(c)  The commission shall ensure that reimbursement is provided only for a telemedicine medical service initiated or [consultation ] provided by a physician [described in Subsection (b) to a health professional who practices in a rural county ].

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(d)  The commission shall require reimbursement for a telemedicine medical service [telemedical consultation ] at the same rate as the Medicaid program reimburses for a comparable in-person medical service [consultation ]. A request for reimbursement may not be denied solely because an in-person medical service [consultation ] between a physician and a patient did not occur.

(e)  A health care facility that receives reimbursement under this section for a telemedicine medical service [consultations ] provided by a physician [physicians ] who practices [practice ] in that facility or [and ] a health professional who participates in a telemedicine medical service [obtains consultations ] under this section shall establish quality of care protocols and patient confidentiality guidelines to ensure that the telemedicine medical service meets [telemedical consultations meet ] legal requirements and acceptable patient care standards.

(f)  The commission may not require a telemedicine medical service [telemedical consultation ] if an in-person consultation with a physician is reasonably available where the patient resides or works. The commission shall require facilities and providers of telemedicine medical services to make a good faith effort to identify and coordinate with existing providers to preserve and protect existing health care systems and medical relationships in an area.

(g)  If a patient receiving a telemedicine medical service has a primary care physician or provider and consents to the notification, the commission shall require that the primary care physician or provider be notified of the telemedicine medical service for the purpose of sharing medical information.

(h)  The commission in consultation with the Texas State Board of Medical Examiners shall monitor and regulate the use of telemedicine medical services to ensure compliance with this section. In addition to any other method of enforcement, the commission may use a corrective action plan to ensure compliance with this section.

(i) [(g) ]  The Texas State Board of Medical Examiners, in consultation with the commission, as appropriate, may adopt rules as necessary to:

(1)  ensure that appropriate care, including quality of care, is provided to patients who receive telemedicine medical services [that are provided through a telemedical consultation ]; [and ]

(2)  prevent abuse and fraud through the use of telemedicine medical services [telemedical consultations ], including rules relating to filing of claims and records required to be maintained in connection with telemedicine;

(3)  establish supervisory requirements for a service delegated to and performed by an individual who is not a physician; and

(4)  define those situations when a face-to-face consultation with a physician is required after a telemedicine medical service.

(j) [(h) ]  The commissioner shall establish an advisory committee to coordinate state telemedicine efforts and assist the commission in:

(1)  evaluating [developing ] policies for telemedicine medical services under Section 531.0216 and this section;

(2)  monitoring the types of programs receiving reimbursement under this section; and

(3)  coordinating the activities of state agencies interested in the use of telemedicine medical services [telemedical consultations under this section ].

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(k)  This section does not affect any requirement relating to:

(1)  a federally qualified health center;

(2)  a rural health clinic; or

(3)  physician delegation of the authority to carry out or sign prescription drug orders to an advanced practice nurse or physician assistant.

SECTION 4.  Subchapter D, Chapter 62, Health and Safety Code, is amended by adding Section 62.157 to read as follows:

Sec. 62.157.  TELEMEDICINE MEDICAL SERVICES. (a) In providing covered benefits to a child, a health plan provider must permit benefits to be provided through telemedicine medical services in accordance with policies developed by the commission.

(b)  The policies must provide for:

(1)  the availability of covered benefits appropriately provided through telemedicine medical services that are comparable to the same types of covered benefits provided without the use of telemedicine medical services; and

(2)  the availability of covered benefits for different services performed by multiple health care providers during a single session of telemedicine medical services, if the commission determines that delivery of the covered benefits in that manner is cost-effective in comparison to the costs that would be involved in obtaining the services from providers without the use of telemedicine medical services, including the costs of transportation and lodging and other direct costs.

(c)  In developing the policies required by Subsection (a), the commission shall consult with the telemedicine advisory committee.

(d)  In this section, "telemedicine medical service" has the meaning assigned by Section 57.042, Utilities Code.

SECTION 5.  Section 1, Article 21.53F, Insurance Code, as added by Section 1, Chapter 880, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

Sec. 1.  DEFINITIONS. In this article:

(1)  "Health benefit plan" means a plan described by Section 2 of this article.

(2)  "Health professional" means:

(A)  a physician;

(B)  an individual who is:

(i)  licensed or certified in this state to perform health care services; and

(ii)  authorized to assist a physician in providing telemedicine medical services that are delegated and supervised by the physician; or

(C)  a licensed or certified health professional acting within the scope of the license or certification who does not perform a telemedicine medical service.

(3)  "Physician" means a person licensed to practice medicine in this state under Subtitle B, Title 3, Occupations Code.

(4)  "Telehealth service" has the meaning assigned by Section 57.042, Utilities Code.

(5)  "Telemedicine medical service" has the meaning assigned by Section 57.042, Utilities Code. ["Telemedicine" means the use of interactive audio, video, or other electronic media to deliver health care. The term includes the use of electronic media for diagnosis, consultation, treatment, transfer of medical data, and medical education. The term does not include services performed using a telephone or facsimile machine. ]

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SECTION 6.  Section 3, Article 21.53F, Insurance Code, as added by Section 1, Chapter 880, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

Sec. 3.  COVERAGE FOR TELEMEDICINE MEDICAL SERVICES AND TELEHEALTH SERVICES. (a) A health benefit plan may not exclude a telemedicine medical service or a telehealth service from coverage under the plan solely because the service is [provided through telemedicine and ] not provided through a face-to-face consultation.

(b)  Benefits [for a service provided through telemedicine ] required under this article may be made subject to a deductible, copayment, or coinsurance requirement. A deductible, copayment, or coinsurance applicable to a particular service provided through telemedicine medical services or telehealth services may not exceed the deductible, copayment, or coinsurance required by the health benefit plan for a comparable medical [the same ] service provided through a face-to-face consultation.

SECTION 7.  Section 4, Article 21.53F, Insurance Code, as added by Section 1, Chapter 880, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

Sec. 4.  INFORMED CONSENT. A treating physician or [other ] health professional [care provider ] who provides or facilitates the use of telemedicine medical services or telehealth services shall ensure that the informed consent of the patient, or another appropriate person with authority to make health care treatment decisions for the patient, is obtained before telemedicine medical services or telehealth services are provided [through telemedicine ].

SECTION 8.  Section 5, Article 21.53F, Insurance Code, as added by Section 1, Chapter 880, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

Sec. 5.  CONFIDENTIALITY. A treating physician or [other ] health professional [care provider ] who provides or facilitates the use of telemedicine medical services or telehealth services shall ensure that the confidentiality of the patient's medical information is maintained as required by Chapter 159, Occupations Code [Section 5.08, Medical Practice Act (Article 4495b, Vernon's Texas Civil Statutes) ], or other applicable law.

SECTION 9.  Section 6(b), Article 21.53F, Insurance Code, as added by Section 1, Chapter 880, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

(b)  The Texas State Board of Medical Examiners, in consultation with the commissioner, as appropriate, may adopt rules as necessary to:

(1)  ensure that appropriate care, including quality of care, is provided to patients who receive telemedicine medical services [that are provided through telemedicine ]; [and ]

(2)  prevent abuse and fraud through use of telemedicine medical services, including rules relating to filing of claims and records required to be maintained in connection with telemedicine medical services;

(3)  ensure adequate supervision of health professionals who are not physicians and who provide telemedicine medical services;

(4)  establish the maximum number of health professionals who are not physicians that a physician may supervise through a telemedicine medical service; and

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(5)  require a face-to-face consultation between a patient and a physician providing a telemedicine medical service within a certain number of days following an initial telemedicine medical service only if the physician has never seen the patient.

SECTION 10.  Section 153.004, Occupations Code, is amended to read as follows:

Sec. 153.004.  RULES REGARDING TELEMEDICINE MEDICAL SERVICES. (a) In consultation with the Health and Human Services Commission and the commissioner of insurance, the board may adopt rules as necessary to:

(1)  ensure that appropriate care is provided to Medicaid and Medicare patients who receive telemedicine medical services [that are provided through telemedicine ]; and

(2)  prevent abuse and fraud in the use of telemedicine medical services for Medicaid and Medicare patients.

(b)  The rules adopted under Subsection [Section ] (a)(2) may include rules relating to filing of claims and records required to be maintained in relation to telemedicine medical services.

SECTION 11.  Section 57.042, Utilities Code, is amended by amending Subdivision (11) and adding Subdivision (12) to read as follows:

(11)  "Telehealth service" means a health service, other than a telemedicine medical service, delivered by a licensed or certified health professional acting within the scope of the health professional's license or certification who does not perform a telemedicine medical service that requires the use of advanced telecommunications technology, other than by telephone or facsimile, including:

(A)  compressed digital interactive video, audio, or data transmission;

(B)  clinical data transmission using computer imaging by way of still-image capture and store and forward; and

(C)  other technology that facilitates access to health care services or medical specialty expertise.

(12)  "Telemedicine medical service" means a health care service initiated by a physician or provided by a health professional acting under physician delegation and supervision for purposes of patient assessment by a health professional, diagnosis or consultation by a physician, treatment, or the transfer of medical data, that requires the use of advanced telecommunications technology, other than by telephone or facsimile, including:

(A)  compressed digital interactive video, audio, or data transmission;

(B)  clinical data transmission using computer imaging by way of still-image capture; and

(C)  other technology that facilitates access to health care services or medical specialty expertise[:

[(A)  means medical services delivered by telecommunications technologies to rural or underserved public not-for-profit health care facilities or primary health care facilities in collaboration with an academic health center and an associated teaching hospital or tertiary center or with another public not-for-profit health care facility; and

[(B)  includes consultive services, diagnostic services, interactive video consultation, teleradiology, telepathology, and distance education for working health care professionals ].

SECTION 12.  Section 57.045, Utilities Code, is amended by adding Subsection (e) to read as follows:

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(e)  The board shall establish an assistance program to provide education concerning the telecommunications infrastructure fund and to facilitate access to funds and programs under this subchapter by health care facilities and by physicians licensed to practice medicine in this state. The assistance program must include a toll-free telephone number and provide access to information through the Internet.

SECTION 13.  Section 57.046(b), Utilities Code, is amended to read as follows:

(b)  The board shall use money in the qualifying entities account for any purpose authorized by this subchapter, including:

(1)  equipment;

(2)  wiring;

(3)  material;

(4)  program development;

(5)  training;

(6)  installation costs; [and ]

(7)  a statewide telecommunications network; and

(8)  funding an automated system to integrate client services and eligibility requirements for health and human services across agencies.

SECTION 14.  Sections 57.047(a) and (b), Utilities Code, are amended to read as follows:

(a)  The board may award a grant to a project or proposal that:

(1)  provides equipment and infrastructure necessary for:

(A)  distance learning;

(B)  an information sharing program of a library; [or ]

(C)  telemedicine medical services; or

(D)  telehealth services;

(2)  develops and implements the initial or prototypical delivery of a course or other distance learning material;

(3)  trains teachers, faculty, librarians, or technicians in the use of distance learning or information sharing materials and equipment;

(4)  develops a curriculum or instructional material specially suited for telecommunications delivery;

(5)  provides electronic information; or

(6)  establishes or carries out an information sharing program.

(b)  The board may award a loan to a project or proposal to acquire equipment needed for distance learning and telemedicine medical service projects.

SECTION 15.  Subchapter C, Chapter 57, Utilities Code, is amended by adding Section 57.0475 to read as follows:

Sec. 57.0475.  ELIGIBILITY FOR GRANTS TO HEALTH CARE FACILITIES. (a) The board may award a grant under Section 57.047(a)(1)(C) only to a health care facility that:

(1)  is a hospital or other entity, including a health clinic, that:

(A)  is supported by local or regional tax revenue;

(B)  is a certified nonprofit health corporation under federal law; or

(C)  is an ambulatory health care center; or

(2)  meets the criteria adopted by the board and the Health and Human Services Commission under Subsection (b).

(b)  The board and the Health and Human Services Commission shall jointly adopt rules prescribing the criteria a health care facility not described by

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Subsection (a)(1) must meet to be eligible to receive a grant under Section 57.047(a)(1)(C). In determining the criteria, the board and commission shall prioritize health care facilities based on:

(1)  the amount of charity care provided by each facility during the year preceding the year in which the facility applies for a grant; and

(2)  the number of Medicaid patients and patients enrolled in the state child health plan treated by each facility during the year preceding the year in which the facility applies for a grant.

(c)  The criteria adopted under Subsection (b) must provide that a health care facility is not eligible to receive a grant under Section 57.047(a)(1)(C) if the health care facility did not provide any charity care or treat any patients described by Subsection (b)(2) during the year preceding the year in which the facility applies for a grant.

SECTION 16.  Section 58.253(a), Utilities Code, is amended to read as follows:

(a)  On customer request, an electing company shall provide private network services to:

(1)  an educational institution;

(2)  a library;

(3)  a nonprofit telemedicine center;

(4)  a public or not-for-profit hospital;

(5)  a project that would have been eligible to be funded by the telecommunications infrastructure fund under Subchapter C, Chapter 57, as that subchapter existed on January 1, 2001; or

(6)  a legally constituted consortium or group of entities listed in this subsection.

SECTION 17.  Subchapter B, Chapter 32, Human Resources Code, is amended by adding Section 32.053 to read as follows:

Sec. 32.053.  HOME TELEMEDICINE PILOT PROGRAM. (a) The Health and Human Services Commission shall establish a pilot program under which certain recipients of medical assistance receive, in addition to other home health care services for which the recipients are eligible, home health care services through home telemonitoring systems located in the recipients' homes.

(b)  The commission shall implement the program in each of the following areas:

(1)  a rural area;

(2)  an urban area;

(3)  a medically underserved area; and

(4)  an area that adjoins this state's international border.

(c)  The commission may reimburse a home and community support services agency participating in the program for services provided by the agency through home telemonitoring systems in an amount not to exceed $300 a month for each home at which services are provided.

(d)  The commission shall adopt eligibility criteria for the program. The criteria must:

(1)  require that a program participant:

(A)  be:

(i)  diagnosed with a chronic illness, including hypertension, congestive heart failure, diabetes mellitus, chronic obstructive pulmonary disease, or a chronic wound;

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(ii)  diagnosed with depression, if it is secondary to a chronic illness; or

(iii)  in need of post-hospitalization care or care related to receipt of an organ transplant, regardless of whether the care is needed before or after the transplant;

(B)  be able to use home telemonitoring system equipment or be assisted by a regular caregiver who is willing and able to use that equipment;

(C)  provide written consent to receipt of home health care services through a home telemonitoring system; and

(D)  be under the care of a physician who consents to the participant's receipt of home health care services through a home telemonitoring system; and

(2)  prohibit a recipient of medical assistance from participating in the program if the recipient:

(A)  is diagnosed with a terminal condition and expected to live for less than six months; or

(B)  requires daily, in-person, home health care visits or invasive procedures.

(e)  The commission shall determine home health care services to be provided to program participants through a home telemonitoring system. Home health care services provided through the system may include:

(1)  educating a program participant regarding self-care and preventive health;

(2)  monitoring a program participant's compliance with medication requirements;

(3)  monitoring a program participant's vital signs;

(4)  providing a program participant with counseling and social support; and

(5)  any other service the commission determines is appropriate.

(f)  In designing and implementing the program, the commission shall ensure that:

(1)  a program participant receives, for the duration of services, at no cost to the participant, home telemonitoring system equipment other than a telephone line and telephone that is necessary for receipt of home health care services through the system;

(2)  a program participant or the participant's regular caregiver receives personal training and written instructions in the use and maintenance of the home telemonitoring system equipment;

(3)  a program participant's satisfaction with home health care services provided through a home telemonitoring system is frequently monitored and evaluated by the commission; and

(4)  the quality of home health care services provided through a home telemonitoring system to a program participant is frequently monitored and evaluated by the commission.

(g)  The commission shall adopt all rules necessary for implementation of the program.

(h)  Not later than December 1, 2004, the commission shall submit a report to the legislature regarding the program that includes:

(1)  an analysis of:

(A)  the program's cost-effectiveness;

(B)  the program's effect on the quality of health care received by program participants; and

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(C)  the satisfaction of program participants with home health care services provided through home telemonitoring systems; and

(2)  recommendations regarding elimination, continuation, or expansion of the program.

(i)  This section expires September 1, 2005.

SECTION 18.  Chapter 533, Health and Safety Code, is amended by adding Subchapter E to read as follows:

SUBCHAPTER E. JAIL DIVERSION PROGRAM

Sec. 533.101.  JAIL DIVERSION PILOT PROGRAM. (a) The board and department shall develop and implement a pilot program in one rural area and one urban area designed to incorporate audiovisual telecommunications systems to:

(1)  divert persons with mental illness from the criminal justice system, when appropriate treatment services are available;

(2)  provide access to appropriate mental health services to persons who have entered the criminal justice system; and

(3)  increase the awareness of law enforcement officers and officials to mental health issues that may bring persons with mental illness into the criminal justice system.

(b)  In designing the program, the commission shall employ to the greatest extent practicable available electronic information systems for the program, including:

(1)  systems to enable the transmission of booking information;

(2)  computer and software systems to match client data to booking information;

(3)  electronic messaging and notification systems; and

(4)  audiovisual teleconferencing or other teleconferencing or telecommunications systems.

(c)  The department and participating local mental health authorities, prosecutorial agencies, law enforcement agencies, jail facilities, courts, county or municipal governments, and providers of psychiatric services shall enter into an agreement regarding the procedures to follow in implementing the program and the duties of each participating entity. The participating county shall be responsible for establishing the diversion team as prescribed by the department.

Sec. 533.102.  PREBOOKING DIVERSION. (a) The pilot program shall incorporate a system for diverting a person with mental illness from the criminal justice system before the person's contact with a law enforcement officer results in:

(1)  charges being brought against the person; or

(2)  the person being detained in a jail.

(b)  The prebooking diversion system shall provide for a law enforcement officer or booking center staff member to request a mental health or crisis stabilization evaluation of a person by a local mental health authority crisis counselor or the equivalent through an audiovisual teleconference. The board by rule shall establish procedures for evaluations performed under the system.

Sec. 533.103.  POSTBOOKING DIVERSION BY COURT. The pilot program shall incorporate a system for diverting a person with mental illness from the criminal justice system by a court at the person's arraignment or a court hearing. A court participating in the pilot program may order:

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(1)  the assessment of a person before the court by the local mental health authority to assess appropriate community mental health treatment options as alternatives to prosecution; and

(2)  a person before the court to undertake appropriate psychiatric treatment as a condition of the dismissal of criminal charges, deferral of prosecution, bail, or probation.

Sec. 533.104.  POSTBOOKING DIVERSION FOR PERSON IN JAIL. (a) The pilot program shall incorporate a system to provide routine mental health treatment to a person in jail by the local mental health authority through an audiovisual teleconferencing system.

(b)  The program must include a jail diversion liaison employed by the local mental health authority who shall:

(1)  determine whether certain jailed individuals are eligible for diversion treatment programs; and

(2)  facilitate the interaction of jail staff and court officials to further the program.

(c)  The local mental health authority must employ a jail diversion team to select candidates for diversion into mental health treatment based on:

(1)  the nature of the offense for which the person is jailed;

(2)  the person's history of incarceration;

(3)  the person's mental status;

(4)  the availability of community mental health resources appropriate for the person;

(5)  public safety factors;

(6)  the person's previous performance in and compliance with treatment settings; and

(7)  other appropriate factors.

Sec. 533.105.  INFORMATION SYSTEM TO SUPPORT POSTBOOKING DIVERSION. (a) To support the postbooking jail diversion program, the pilot program must provide for implementation of an information system designed to quickly identify a person with a serious mental illness who has entered the local jail system.

(b)  The pilot program must provide for electronic transmission of information concerning all admissions to jails participating in the program to an information system at the local mental health authority.

(c)  The local mental health authority shall ensure that the authority's information system automatically:

(1)  identifies whether persons admitted to jail are current or former clients of the authority using the person's name, date of birth, social security number, sex, or other identifying information; and

(2)  notifies a jail diversion team and case manager at the authority when a client or former client of the authority is identified as having been admitted to jail.

Sec. 533.106.  REPORTS TO LEGISLATURE. The board shall evaluate the pilot program under this subchapter and publish a report on the performance of the program in providing needed treatment and in saving or increasing costs to the jail and mental health systems. The board shall deliver the report to the governor, lieutenant governor, and speaker of the house of representatives not later than November 1 of each even-numbered year.

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Sec. 533.107.  EXPIRATION. This subchapter expires September 1, 2005.

SECTION 19.  (a) For purposes of this section, a licensed dentist may delegate orally, in writing, or through advanced audio and video telecommunications services a service, task, or procedure to a dental hygienist who is under the supervision and responsibility of the dentist, if:

(1)  the dental hygienist is licensed to perform the service, task, or procedure;

(2)  the supervising dentist examines the patient either in person or through advanced audio and video telecommunications services:

(A)  at the time the service, task, or procedure is performed by the dental hygienist; or

(B)  during the 12 calendar months preceding the date of performance of the service, task, or procedure by the dental hygienist; and

(3)  the dental hygienist does not:

(A)  diagnose a dental disease or ailment;

(B)  prescribe a treatment or a regimen;

(C)  prescribe, order, or dispense medication; or

(D)  perform any procedure that is irreversible or involves the intentional cutting of soft or hard tissue by any means.

(b)  In this section:

(1)  "Dental professional" means:

(A)  a dentist licensed under Subtitle D, Title 3, Occupations Code; or

(B)  a dental hygienist licensed under Chapter 262, Occupations Code, practicing under the supervision of a dentist.

(2)  "Student" means a person who is under 19 years of age, is enrolled in a public school, and receives dental services under Chapter 32, Human Resources Code.

(3)  "Teledentistry dental services" means a dental service that utilizes, in whole or in part, advanced telecommunications technology including:

(A)  compressed digital interactive video, audio, or data transmission;

(B)  clinical data transmission via computer imaging for teleradiology or telepathology; and

(C)  other technology that facilitates access in rural and underserved counties to dental services or dental specialty expertise.

(c)  The commissioner of human services shall appoint a program administrator to administer a pilot program that uses teledentistry and other methods of delivering dental services to provide dental services to students in one public school district in the state.

(d)  The program administrator shall establish an advisory committee to assist the program administrator in developing and implementing the pilot program.

(e)  In developing the pilot program, the program administrator shall design the program in a manner that:

(1)  increases access to dental services and enhances the delivery of dental services to students;

(2)  ensures the provision of oral health education services;

(3)  provides for effective and appropriate supervision by a dentist of other dental professionals providing care under the program; and

(4)  enables the state to determine whether extension of the use of teledentistry would improve the delivery of dental services.

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(f)  The program administrator shall adopt procedures as necessary to:

(1)  ensure that appropriate care, including quality of care, is provided to students who receive teledentistry dental services;

(2)  ensure adequate supervision of dental professionals who are not dentists and who provide teledentistry dental services;

(3)  establish the maximum number of dental professionals who are not dentists that a dentist may supervise; and

(4)  require a face-to-face consultation with a dentist within a certain number of days following a teledentistry dental service.

(g)  Only a teledentistry dental service initiated or provided by a licensed dentist in this state may be reimbursed under the Medicaid program. Medicaid reimbursement for a teledentistry dental service shall be at the same rate as the Medicaid program reimburses for a comparable in-person dental service. A request for reimbursement may not be denied solely because an in-person consultation between a dentist or other dental professional and a patient did not occur. Reimbursement for a dental hygienist for service shall be made through the supervising dentist.

(h)  A dental hygienist must act under the remote supervision of a local dentist. Both the dentist and the hygienist must be located within the boundaries of the school district served by the pilot program.

(i)  Images and assessment information shall be sent by the dental hygienist to a supervising dentist either live or by means of store and forward technology. After a dentist has reviewed the required information, the dentist may authorize the provision of preventive services by the dental hygienist located at the school.

(j)  A dental hygienist participating in the pilot program may initiate screening and assessment services and, under the supervision of a dentist, may perform any procedure the hygienist is authorized to perform under law.

(k)  A teledentistry dental service may not be provided if an in-person consultation with a dentist is reasonably available to a student. Dentists and other dental professionals participating in the pilot program shall make a good faith effort to identify and coordinate with existing providers to preserve and protect existing dental care systems and dental relationships.

(l)  The program administrator shall establish a control group not to exceed 1,000 students to provide a benchmark for measuring the performance of the pilot program. Each student in the control group shall be examined by a dentist, in person, at the end of the program to evaluate the effectiveness of teledentistry dental services provided during the program. The examining dentist must practice in a dental office located outside the boundaries of the school district served by the pilot program.

(m)  The program administrator shall use the results of the pilot program to:

(1)  determine the efficacy of teledentistry; and

(2)  determine the effectiveness of teledentistry in increasing access to dental services and improving oral health of students.

(n)  A dental professional who provides teledentistry dental services shall ensure that the informed consent of the student or a person authorized to provide consent for the student is obtained before teledentistry dental services are provided.

(o)  Students participating in the pilot program must be referred to local dentists for restorative care and monitored to ensure that restorative services are provided.

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(p)  Not later than December 31, 2002, the program administrator shall submit a report to the legislature containing the following:

(1)  the number of students who received teledentistry dental services;

(2)  the types of teledentistry dental services provided;

(3)  the cost and level of utilization of teledentistry dental services;

(4)  the effect of the pilot program on school absenteeism of students in the control group;

(5)  a description of improvements in the oral health of students in the pilot program; and

(6)  recommendations for changes in or the expansion of the pilot program.

(q)  This section expires and the advisory committee is abolished December 31, 2002.

SECTION 20.  Not later than October 1, 2001, the Health and Human Services Commission and the Telecommunications Infrastructure Fund Board shall adopt minimum standards for an operating system used by a health care facility in providing telemedicine medical services to a Medicaid recipient as required by Section 531.02161, Government Code, as added by this Act.

SECTION 21.  Not later than January 1, 2002, the Health and Human Services Commission shall adopt rules required by Section 531.0217, Government Code, as amended by this Act.

SECTION 22.  (a) The commissioner of human services shall appoint a program administrator for the teledentistry pilot program, as added by Section 19 of this Act, not later than the 30th day after the effective date of this Act.

(b)  The program administrator shall appoint an advisory committee and shall begin implementing the teledentistry pilot program not later than the 30th day after the date the program administrator is appointed.

SECTION 23.  Section 57.046(b)(8), Utilities Code, as added by this Act, expires September 1, 2003.

SECTION 24.  If before implementing any provision of this Act a state agency determines that a waiver or authorization from a federal agency is necessary for implementation of that provision, the agency affected by the provision shall request the waiver or authorization and may delay implementing that provision until the waiver or authorization is granted.

SECTION 25.  This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2001.

Floor Amendment No. 1

Amend CSSB 789 as follows:

(1) In Section 1 of the bill, in amended Section 531.0216(b), Government Code, strike added Subdivision (4) (House committee printing, page 1, lines 19-22), and substitute the following:

(4) consult with the Texas Department of Health and the telemedicine advisory committee to establish procedures to:

(A) identify clinical evidence supporting delivery of health care services using a telecommunications system by January 1, 2001;

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(B) establish pilot studies for telemedicine medical service delivery; and

(C) annually review health care services, considering new clinical findings, to determine whether reimbursement for particular services should be denied or authorized;

(2) In Section 17 of the bill, in added Section 32.053(f), Human Resources Code (House committee printing, page 22, line 6), strike "and".

(3) In Section 17 of the bill, in added Section 32.053(f), Human Resources Code (House committee printing, page 22, line 9), between "commission" and the period, insert the following:

"; and

(5) the home and community support services agency that is providing services using home telemonitoring system equipment pays for the equipment".

(4) In Section 18 of the bill, in added Section 533.101, Health and Safety Code (House committee printing, page 24, between lines 4 and 5), add a new Subsection (d) to read as follows:

(d) If appropriate treatment services are not available, a person with mental illness does not have to be diverted from the criminal justice system.

The amendments were read.

Senator Moncrief moved to concur in the House amendments to SB 789.

The motion prevailed by the following vote: Yeas 30, Nays 0, Present-not voting 1.

Present-not voting: Mr. President.

BIRTHDAY GREETINGS EXTENDED

Senator Ellis was recognized and announced to the Senate that today is Senate Parliamentarian Walter Fisher's birthday.

The Senate extended birthday greetings to the Parliamentarian.

SENATE BILL 198 WITH HOUSE AMENDMENT

Senator Moncrief called SB 198 from the President's table for consideration of the House amendment to the bill.

The President laid the bill and the House amendment before the Senate.

Amendment

Amend SB 198 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to executory contracts for the conveyance of real property.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Subchapters D and E, Chapter 5, Property Code, are amended to consolidate the subchapters by amending and redesignating Section 5.065 as Section 5.061, amending and redesignating Section 5.091 as Section 5.062, amending and redesignating Section 5.062 as Section 5.063, amending and redesignating Section 5.061 as Section 5.064, amending and redesignating Section 5.063 as Section 5.065, amending and redesignating Section 5.101 as Section 5.066,

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redesignating Section 5.064 as Section 5.067, amending and redesignating Section 5.093 as Section 5.068, amending and redesignating Section 5.094 as Section 5.069, adding Section 5.070, amending and redesignating Section 5.095 as Section 5.071, adding Section 5.072, amending and redesignating Section 5.096 as Section 5.073, redesignating Section 5.097 as Section 5.074, amending and redesignating Section 5.098 as Section 5.075, amending and redesignating Section 5.099 as Section 5.076, amending and redesignating Section 5.100 as Section 5.077, adding Section 5.078, amending and redesignating Section 5.102 as Section 5.079, and redesignating Section 5.103 as Section 5.080 to read as follows:

Sec. 5.061 [5.065 ].  DEFINITION [DEFAULT ]. In this subchapter, "default" means the failure to:

(1)  make a timely payment; or

(2)  comply with a term of an executory contract.

Sec. 5.062 [5.091 ].  APPLICABILITY. (a) [This subchapter applies only to an executory contract that covers real property located in a county that, as determined by the Texas Department of Housing and Community Affairs:

[(1)  has a per capita income that averaged 25 percent below the state average for the most recent three consecutive years for which statistics are available and an unemployment rate that averaged 25 percent above the state average for the most recent three consecutive years for which statistics are available; and

[(2)  is within 200 miles of an international border.

[(b) ]  This subchapter applies only to a transaction involving an executory contract for conveyance of real property used or to be used as the purchaser's residence or as the residence of a person related to the purchaser within the second degree by consanguinity or affinity, as determined under Chapter 573, Government Code. For purposes of this subchapter, a lot measuring one acre or less is presumed to be residential property.

(b) [(c) ]  This subchapter does not apply to a transaction involving the sale of state land or a sale of land by the Veterans' Land Board under an executory contract.

(c) [(d) ]  This subchapter does not apply to an executory contract that provides for the delivery of a deed from the seller to the purchaser within 180 days of the date of the final execution of the executory contract.

(d)  Section 5.066 and Sections 5.068-5.080 do not apply to a transaction involving an executory contract for conveyance if the purchaser of the property:

(1)  is related to the seller of the property within the second degree by consanguinity or affinity, as determined under Chapter 573, Government Code; and

(2)  has waived the applicability of those sections in a written agreement.

Sec. 5.063 [5.062 ].  NOTICE. (a) Notice under Section 5.064 [5.061 of this code ] must be in writing and [. If the notice is mailed, it ] must be delivered by registered or certified mail, return receipt requested. The notice must be conspicuous and printed in 14-point boldface type or 14-point uppercase typewritten letters, and must include on a separate page the statement:

NOTICE

YOU ARE NOT COMPLYING WITH THE TERMS OF THE CONTRACT TO BUY YOUR PROPERTY. UNLESS YOU TAKE THE ACTION SPECIFIED IN THIS NOTICE BY (date) THE SELLER HAS THE RIGHT TO TAKE POSSESSION OF YOUR PROPERTY.

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(b)  The notice must also:

(1)  identify and explain the remedy the seller intends to enforce;

(2)  if the purchaser has failed to make a timely payment, specify:

(A)  the delinquent amount, itemized into principal and interest;

(B)  any additional charges claimed, such as late charges or attorney's fees; and

(C)  the period to which the delinquency and additional charges relate; and

(3)  if the purchaser has failed to comply with a term of the contract, identify the term violated and the action required to cure the violation.

(c)  Notice by mail is given when it is mailed to the purchaser's residence or place of business. [Notice by other writing is given when it is delivered to the purchaser at the purchaser's residence or place of business. ] The affidavit of a person knowledgeable of the facts to the effect that notice was given is prima facie evidence of notice in an action involving a subsequent bona fide purchaser for value if the purchaser is not in possession of the real property and if the stated time to avoid the forfeiture has expired. A bona fide subsequent purchaser for value who relies upon the affidavit under this subsection shall take title free and clear of the contract.

Sec. 5.064 [5.061 ].  SELLER'S REMEDIES ON DEFAULT [AVOIDANCE OF FORFEITURE AND ACCELERATION OR OF RESCISSION ]. A seller may enforce the remedy of rescission or of forfeiture and acceleration against a purchaser in default under an executory contract for conveyance of real property [used or to be used as the purchaser's residence ] only if:

(1)  the seller notifies the purchaser of:

(A) [(1) ]  the seller's intent to enforce a remedy under this section; and

(B) [(2) ]  the purchaser's right to cure the default within the 60-day period described by Section 5.065;

(2)  the purchaser fails to cure the default within the 60-day period described by Section 5.065; and

(3)  Section 5.066 does not apply [expiration of the following periods:

[(A)  if the purchaser has paid less than 10 percent of the purchase price, 15 days after the date notice is given;

[(B)  if the purchaser has paid 10 percent or more but less than 20 percent of the purchase price, 30 days after the date notice is given; and

[(C)  if the purchaser has paid 20 percent or more of the purchase price, 60 days after the date notice is given ].

Sec. 5.065 [5.063 ].  RIGHT TO CURE DEFAULT. Notwithstanding an agreement to the contrary, a purchaser in default under an executory contract for the conveyance of real property [used or to be used as the purchaser's residence ] may[, at any time before expiration of the applicable period provided by Section 5.061 of this code, ] avoid the enforcement of a remedy described by Section 5.064 [that section ] by complying with the terms of the contract on or before the 60th day after the date notice is given under that section [up to the date of compliance ].

Sec. 5.066 [5.101 ].  EQUITY PROTECTION; SALE OF PROPERTY. (a) If a purchaser defaults after the purchaser has paid 40 percent or more of the amount due

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or the equivalent of 48 monthly payments under the executory contract, the seller is granted the power to sell, through a trustee designated by the seller, the purchaser's interest in the property as provided by this section. The seller may not enforce the remedy of rescission or of forfeiture and acceleration.

(b)  The seller shall notify a purchaser of a default under the contract and allow the purchaser at least 60 days after the date notice is given to cure the default. The notice must be provided as prescribed by Section 5.063 [5.062 ] except that the notice must substitute the following statement:

NOTICE

YOU ARE NOT COMPLYING WITH THE TERMS OF THE

CONTRACT TO BUY YOUR PROPERTY. UNLESS YOU TAKE

THE ACTION SPECIFIED IN THIS NOTICE BY (date) A TRUSTEE DESIGNATED BY THE SELLER HAS THE RIGHT TO SELL

YOUR PROPERTY AT A PUBLIC AUCTION.

(c)  The trustee or a substitute trustee designated by the seller must post, file, and serve a notice of sale and the county clerk shall record and maintain the notice of sale as prescribed by Section 51.002. A notice of sale is not valid unless it is given after the period to cure has expired.

(d)  The trustee or a substitute trustee designated by the seller must conduct the sale as prescribed by Section 51.002. The seller must:

(1)  convey to a purchaser at a sale conducted under this section fee simple title to the real property; and

(2)  warrant that the property is free from any encumbrance.

(e)  The remaining balance of the amount due under the executory contract is the debt for purposes of a sale under this section. If the proceeds of the sale exceed the debt amount, the seller shall disburse the excess funds to the purchaser under the executory contract. If the proceeds of the sale are insufficient to extinguish the debt amount, the seller's right to recover the resulting deficiency is subject to Sections 51.003, 51.004, and 51.005 unless a provision of the executory contract releases the purchaser under the contract from liability.

(f)  The affidavit of a person knowledgeable of the facts that states that the notice was given and the sale was conducted as provided by this section is prima facie evidence of those facts [in an action involving a bona fide purchaser at the sale or a subsequent bona fide purchaser for value if the purchaser under the executory contract is not in possession of the property and if the period to cure the default has expired ]. A [bona fide ] purchaser for value who relies on an affidavit under this subsection acquires title to the property free and clear of the executory contract.

(g)  If a purchaser defaults before the purchaser has paid 40 percent of the amount due or the equivalent of 48 monthly payments under the executory contract, the seller may enforce the remedy of rescission or of forfeiture and acceleration of the indebtedness if the seller complies with the notice requirements of Sections 5.063 and 5.064 [5.061 and 5.062 ].

Sec. 5.067 [5.064 ].  PLACEMENT OF LIEN FOR UTILITY SERVICE. Notwithstanding any terms of a contract to the contrary, the placement of a lien for the reasonable value of improvements to residential real estate for purposes of providing utility service to the property shall not constitute a default under the terms of an executory contract for the purchase of the real property.

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Sec. 5.068 [5.093 ].  FOREIGN [SPANISH ] LANGUAGE REQUIREMENT. If the negotiations that precede the execution of an executory contract are conducted primarily in a language other than English [Spanish ], the seller shall provide a copy in that language [Spanish ] of all written documents relating to the transaction, including the contract, disclosure notices [notice ], [and ] annual accounting statements, [required by this subchapter ] and a notice of default required by this subchapter [Subchapter D ].

Sec. 5.069 [5.094 ].  SELLER'S DISCLOSURE OF PROPERTY CONDITION. (a) Before an executory contract is signed by the purchaser, the seller shall provide the purchaser with:

(1)  a survey, which was completed within the past year, or plat of a current survey of the real property;

(2)  a legible copy of any document that describes an encumbrance or other claim, including a restrictive covenant or easement, that affects title to the real property; and

(3)  a written notice, which must be attached to the contract, informing the purchaser of the condition of the property that must, at a minimum, be executed by the seller and purchaser and read substantially similar to the following:

WARNING

IF ANY OF THE ITEMS BELOW HAVE NOT BEEN CHECKED, YOU MAY NOT BE ABLE TO LIVE ON THE PROPERTY.

SELLER'S DISCLOSURE NOTICE

CONCERNING THE PROPERTY AT (street address or legal description and city)

THIS DOCUMENT STATES CERTAIN APPLICABLE FACTS ABOUT THE PROPERTY [LAND ] YOU ARE CONSIDERING PURCHASING.

CHECK ALL THE ITEMS THAT ARE APPLICABLE OR TRUE:

_____  The property is in a recorded subdivision.

_____  The property has water service that provides potable water.

_____  The property has sewer service.

_____  The property has been approved by the appropriate municipal, county, or state agency for installation of a septic system.

_____  The property has electric service.

_____  The property is not in a floodplain.

_____  The roads to the boundaries of the property are paved and maintained by:

_____  the seller;

_____  the owner of the property on which the road exists;

_____  the municipality;

_____  the county; or

_____  the state.

_____  No individual or entity other than the seller:

(1)  owns the property;

(2)  has a claim of ownership to the property; or

(3)  has an interest in the property.

_____  No individual or entity has a lien filed against the property.

[____   There are no back taxes owed on the property. ]

_____  There are no restrictive covenants, easements, or other title exceptions or encumbrances that prohibit construction of a house on the property.

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NOTICE: SELLER ADVISES PURCHASER TO:

(1)  OBTAIN A TITLE ABSTRACT OR TITLE COMMITMENT COVERING THE PROPERTY AND HAVE THE ABSTRACT OR COMMITMENT REVIEWED BY AN ATTORNEY BEFORE SIGNING A CONTRACT OF THIS TYPE; AND

(2)  PURCHASE AN OWNER'S POLICY OF TITLE INSURANCE COVERING THE PROPERTY.

____________________________ ____________________________

(Date) (Signature of Seller)

____________________________ ____________________________

(Date) (Signature of Purchaser)

(b)  If the property is not located in a recorded subdivision, the seller shall provide the purchaser with a separate disclosure form stating that utilities may not be available to the property until the subdivision is recorded as required by law.

(c)  If the seller advertises property for sale under an executory contract, the advertisement must disclose information regarding the availability of water, sewer, and electric service.

(d)  The seller's failure to provide information required by this section:

(1)  is a false, misleading, or deceptive act or practice within the meaning of Section 17.46, Business & Commerce Code, and is actionable in a public or private suit brought under Subchapter E, Chapter 17, Business & Commerce Code; and

(2)  entitles the purchaser to cancel and rescind the executory contract and receive a full refund of all payments made to the seller.

(e)  Subsection (d) does not limit the purchaser's remedy against the seller for other false, misleading, or deceptive acts or practices actionable in a suit brought under Subchapter E, Chapter 17, Business & Commerce Code.

Sec. 5.070.  SELLER'S DISCLOSURE OF TAX PAYMENTS AND INSURANCE COVERAGE. (a) Before an executory contract is signed by the purchaser, the seller shall provide the purchaser with:

(1)  a tax certificate from the collector for each taxing unit that collects taxes due on the property as provided by Section 31.08, Tax Code; and

(2)  a legible copy of any insurance policy, binder, or other evidence relating to the property that indicates:

(A)  the name of the insurer and the insured;

(B)  a description of the property insured; and

(C)  the amount for which the property is insured.

(b)  The seller's failure to provide information required by this section:

(1)  is a false, misleading, or deceptive act or practice within the meaning of Section 17.46, Business & Commerce Code, and is actionable in a public or private suit brought under Subchapter E, Chapter 17, Business & Commerce Code; and

(2)  entitles the purchaser to cancel and rescind the executory contract and receive a full refund of all payments made to the seller.

(c)  Subsection (b) does not limit the purchaser's remedy against the seller for other false, misleading, or deceptive acts or practices actionable in a suit brought under Subchapter E, Chapter 17, Business & Commerce Code.

Sec. 5.071 [5.095 ].  SELLER'S DISCLOSURE OF FINANCING TERMS. Before an executory contract is signed by the purchaser, the seller shall provide to the purchaser a written statement that specifies:

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(1)  the purchase price of the property;

(2)  the interest rate charged under the contract;

(3)  the dollar amount, or an estimate of the dollar amount if the interest rate is variable, of the interest charged for the term of the contract;

(4)  the total amount of principal and interest to be paid under the contract;

(5)  the late charge, if any, that may be assessed under the contract; and

(6)  the fact that the seller may not charge a prepayment penalty or any similar fee if the purchaser elects to pay the entire amount due under the contract before the scheduled payment date under the contract.

Sec. 5.072.  ORAL AGREEMENTS PROHIBITED. (a) An executory contract is not enforceable unless the contract is in writing and signed by the party to be bound or by that party's authorized representative.

(b)  The rights and obligations of the parties to a contract are determined solely from the written contract, and any prior oral agreements between the parties are superseded by and merged into the contract.

(c)  An executory contract may not be varied by any oral agreements or discussions that occur before or contemporaneously with the execution of the contract.

(d)  The seller shall include in a separate document or in a provision of the contract a statement printed in 14-point boldfaced type or 14-point uppercase typewritten letters that reads substantially similar to the following:

THIS EXECUTORY CONTRACT REPRESENTS THE FINAL AGREEMENT BETWEEN THE SELLER AND PURCHASER AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

_____________________ ____________________________

(Date) (Signature of Seller)

_____________________ ____________________________

(Date) (Signature of Purchaser)

(e)  The seller's failure to provide the notice required by this section:

(1)  is a false, misleading, or deceptive act or practice within the meaning of Section 17.46, Business & Commerce Code, and is actionable in a public or private suit brought under Subchapter E, Chapter 17, Business & Commerce Code; and

(2)  entitles the purchaser to cancel and rescind the executory contract and receive a full refund of all payments made to the seller.

(f)  Subsection (e) does not limit the purchaser's remedy against the seller for other false, misleading, or deceptive acts or practices actionable in a suit brought under Subchapter E, Chapter 17, Business & Commerce Code.

Sec. 5.073 [5.096 ].  CONTRACT TERMS PROHIBITED. A seller may not include as a term of the executory contract a provision that:

(1)  imposes an additional late-payment fee that exceeds the lesser of:

(A)  eight percent of the monthly payment under the contract; or

(B)  the actual administrative cost of processing the late payment;

(2)  prohibits the purchaser from pledging the purchaser's interest in the property as security to obtain a loan to place improvements, including utility improvements or fire protection improvements, on the property; or

(3)  imposes a prepayment penalty or any similar fee if the purchaser elects to pay the entire amount due under the contract before the scheduled payment date under the contract.

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Sec. 5.074 [5.097 ].  PURCHASER'S RIGHT TO CANCEL CONTRACT WITHOUT CAUSE. (a) In addition to other rights or remedies provided by law, the purchaser may cancel and rescind an executory contract for any reason by sending by telegram or certified or registered mail, return receipt requested, or by delivering in person a signed, written notice of cancellation to the seller not later than the 14th day after the date of the contract.

(b)  If the purchaser cancels the contract as provided by Subsection (a), the seller shall, not later than the 10th day after the date the seller receives the purchaser's notice of cancellation:

(1)  return to the purchaser the executed contract and any property exchanged or payments made by the purchaser under the contract; and

(2)  cancel any security interest arising out of the contract.

(c)  The seller shall include in immediate proximity to the space reserved in the executory contract for the purchaser's signature a statement printed in 14-point boldface type or 14-point uppercase typewritten letters that reads substantially similar to the following:

YOU, THE PURCHASER, MAY CANCEL THIS CONTRACT AT ANY TIME DURING THE NEXT TWO WEEKS. THE DEADLINE FOR CANCELING THE CONTRACT IS (date). THE ATTACHED NOTICE OF CANCELLATION EXPLAINS THIS RIGHT.

(d)  The seller shall provide a notice of cancellation form to the purchaser at the time the purchaser signs the executory contract that is printed in 14-point boldface type or 14-point uppercase typewritten letters and that reads substantially similar to the following:

NOTICE OF CANCELLATION

(date of contract)

YOU MAY CANCEL THE EXECUTORY CONTRACT FOR ANY

REASON WITHOUT ANY PENALTY OR OBLIGATION BY (date).

(1)  YOU MUST SEND BY TELEGRAM OR CERTIFIED OR

REGISTERED MAIL, RETURN RECEIPT REQUESTED, OR DELIVER IN PERSON A SIGNED AND DATED COPY OF THIS CANCELLATION NOTICE OR ANY OTHER WRITTEN NOTICE TO (Name of Seller) AT (Seller's Address) BY (date).

(2)  THE SELLER SHALL, NOT LATER THAN THE 10TH DAY

AFTER THE DATE THE SELLER RECEIVES YOUR CANCELLATION NOTICE:

(A)  RETURN THE EXECUTED CONTRACT AND ANY PROPERTY EXCHANGED OR PAYMENTS MADE BY YOU UNDER THE CONTRACT; AND

(B)  CANCEL ANY SECURITY INTEREST ARISING OUT OF THE CONTRACT.

I ACKNOWLEDGE RECEIPT OF THIS NOTICE OF CANCELLATION FORM.

_________________________ _______________________

(Date) (Purchaser's Signature)

I HEREBY CANCEL THIS CONTRACT.

_________________________ _______________________

(Date) (Purchaser's Signature)

(e)  The seller may not request the purchaser to sign a waiver of receipt of the notice of cancellation form required by this section.

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Sec. 5.075 [5.098 ].  PURCHASER'S RIGHT TO PLEDGE INTEREST IN PROPERTY ON CONTRACTS ENTERED INTO BEFORE SEPTEMBER 1, 2001 [1995 ]. (a) On an executory contract entered into before September 1, 2001 [1995 ], a purchaser may pledge the interest in the property, which accrues pursuant to Section 5.066 [5.101 ], only to obtain a loan for improving the safety of the property or any improvements on the property.

(b)  Loans that improve the safety of the property and improvements on the property include loans for:

(1)  improving or connecting a residence to water service;

(2)  improving or connecting a residence to a wastewater system;

(3)  building or improving a septic system;

(4)  structural improvements in the residence; and

(5)  improved fire protection.

Sec. 5.076 [5.099 ].  RECORDING REQUIREMENTS. (a) Except as provided by Subsection (b), the seller shall record the executory contract, including the attached disclosure statement required by Section 5.069 [5.094 ], as prescribed by Title 3 on or before the 30th day after the date the contract is executed.

(b)  Section 12.002(c) does not apply to an executory contract filed for record under this section.

(c)  If the executory contract is terminated for any reason, the seller shall record the instrument that terminates the contract.

(d)  The county clerk shall collect the filing fee prescribed by Section 118.011, Local Government Code.

Sec. 5.077 [5.100 ].  ANNUAL ACCOUNTING STATEMENT. (a) The seller shall provide the purchaser with an annual statement in January of each year for the term of the executory contract. If the seller mails the statement to the purchaser, the statement must be postmarked not later than January 31.

(b)  The statement must include the following information:

(1)  the amount paid under the contract;

(2)  the remaining amount owed under the contract;

(3)  the number of payments remaining under the contract; [and ]

(4)  the amounts paid to taxing authorities on the purchaser's behalf if collected by the seller;

(5)  the amounts paid to insure the property on the purchaser's behalf if collected by the seller;

(6)  if the property has been damaged and the seller has received insurance proceeds, an accounting of the proceeds applied to the property; and

(7)  if the seller has changed insurance coverage, a legible copy of the current policy, binder, or other evidence that satisfies the requirements of Section 5.070(a)(2).

(c)  A [If the ] seller who fails to comply with Subsection (a) is liable to [, ] the purchaser for [may ]:

(1)  liquidated damages in the amount of $250 a day for each day after January 31 that [notify ] the seller fails to provide [that ] the purchaser with [has not received ] the statement [and will deduct 15 percent of each monthly payment due until the statement is received ]; and

(2)  reasonable attorney's fees [not earlier than the 25th day after the date the purchaser provides the seller notice under this subsection, deduct 15 percent of each monthly payment due until the statement is received by the purchaser.

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[(d)  A purchaser who makes a deduction under Subsection (c) is not required to reimburse the seller for the amount deducted ].

Sec. 5.078.  DISPOSITION OF INSURANCE PROCEEDS. (a) The named insured under an insurance policy, binder, or other coverage relating to property subject to an executory contract for the conveyance of real property shall inform the insurer, not later than the 10th day after the date the coverage is obtained or the contract executed, whichever is later, of:

(1)  the executory contract for conveyance and the term of the contract; and

(2)  the name and address of the other party to the contract.

(b)  An insurer who disburses proceeds under an insurance policy, binder, or other coverage relating to property that has been damaged shall issue the proceeds jointly to the purchaser and the seller designated in the contract.

(c)  If proceeds under an insurance policy, binder, or other coverage are disbursed, the purchaser and seller shall ensure that the proceeds are used to repair, remedy, or improve the condition on the property.

(d)  The failure of a seller or purchaser to comply with Subsection (c) is a false, misleading, or deceptive act or practice within the meaning of Section 17.46, Business & Commerce Code, and is actionable in a public or private suit brought under Subchapter E, Chapter 17, Business & Commerce Code.

(e)  Subsection (d) does not limit either party's remedy for other false, misleading, or deceptive acts or practices actionable in a suit brought under Subchapter E, Chapter 17, Business & Commerce Code.

Sec. 5.079 [5.102 ].  TITLE TRANSFER. (a) The seller shall transfer recorded, legal title of the property covered by the executory contract to the purchaser not later than the 30th day after the date the seller receives the purchaser's final payment due under the contract.

(b)  A seller who violates Subsection (a) is liable to the purchaser for [subject to a penalty of ]:

(1)  liquidated damages in the amount of:

(A)  $250 a day for each day the seller fails to transfer the title to the purchaser during the period that begins the 31st day and ends the 90th day after the date the seller receives the purchaser's final payment due under the contract; and

(B) [(2) ]  $500 a day for each day the seller fails to transfer title to the purchaser after the 90th day after the date the seller receives the purchaser's final payment due under the contract; and

(2)  reasonable attorney's fees.

(c)  If a person to whom a seller's property interest passes by will or intestate succession is required to obtain a court order to clarify the person's status as an heir or to clarify the status of the seller or the property before the person may convey good and indefeasible title to the property, the court in which the action is pending may waive payment of the liquidated damages and attorney's fees under Subsection (b) if the court finds that the person is pursuing the action to establish good and indefeasible title with reasonable diligence.

(d) [(c) ]  In this section, "seller" includes a successor, assignee, personal representative, executor, or administrator of the seller.

Sec. 5.080 [5.103 ].  LIABILITY FOR DISCLOSURES. For purposes of this subchapter, a disclosure required by this subchapter that is made by a seller's agent is a disclosure made by the seller.

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SECTION 2.  The following are repealed:

(1)  the heading to Subchapter E, Chapter 5, Property Code; and

(2)  Section 5.092, Property Code.

SECTION 3.  (a) This Act takes effect September 1, 2001.

(b)  The changes in law made by Sections 5.063, 5.064, 5.065, and 5.066, Property Code, as amended and redesignated by this Act, apply only to a purchaser who defaults under Subchapter D, Chapter 5, Property Code, as amended by this Act, on or after September 1, 2001, regardless of when the contract was entered into. A purchaser who is in default before September 1, 2001, is covered by the law in effect when the default occurred, and the former law is continued in effect for that purpose.

(c)  The changes in law made by Sections 5.068 and 5.069, Property Code, as amended and redesignated by this Act, and Section 5.070, Property Code, as added by this Act, apply only to transactions involving executory contracts for conveyance for which negotiations begin on or after September 1, 2001. For purposes of this subsection, negotiations begin on the date an offer to enter into an executory contract for conveyance is made. Transactions involving executory contracts for conveyance for which negotiations begin before September 1, 2001, are covered by the law in effect when the negotiations began, and the former law is continued in effect for that purpose.

(d)  The change in law made by the amendment of Section 5.091 and the repeal of Section 5.092, Property Code, by this Act and the application of Section 5.071, Property Code, as amended and redesignated by this Act, and 5.080, Property Code, as redesignated by this Act, applies only to transactions involving executory contracts for conveyance for which negotiations begin on or after September 1, 2001. For purposes of this subsection, negotiations begin on the date an offer to enter into an executory contract for conveyance is made.

(e)  The change in law made by the amendment of Section 5.091 and the repeal of Section 5.092, Property Code, by this Act and the application of Section 5.072, Property Code, as added by this Act, Section 5.074, Property Code, as redesignated by this Act, and Sections 5.073 and 5.076, Property Code, as amended and redesignated by this Act, applies only to a contract entered into on or after September 1, 2001.

(f)  The change in law made by the amendment of Section 5.091 and the repeal of Section 5.092, Property Code, by this Act and the application of Section 5.075, Property Code, as amended and redesignated by this Act, applies to a purchaser on or after September 1, 2001, who accrues interest as provided by that section regardless of when the interest accrued.

(g)  The changes in law made by the amendment of Section 5.091 and the repeal of Section 5.092, Property Code, by this Act and the application of Sections 5.077(a) and (b), Property Code, as amended and redesignated by this Act, and Section 5.079(a), Property Code, as redesignated by this Act, apply to an executory contract on or after September 1, 2001, regardless of when the contract was entered into.

(h)  The change in law made by Sections 5.077(c) and 5.079(b), Property Code, as amended and redesignated by this Act, applies only to a violation that occurs on or after September 1, 2001. A violation that occurs before September 1, 2001, is covered by the law in effect when the violation occurred, and the former law is continued in effect for that purpose.

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(i)  The change in law made by Section 5.078, Property Code, as added by this Act, applies to an executory contract regardless of when the contract was entered into. A named insured who currently holds an insurance policy binder or other coverage relating to property subject to an executory contract shall notify the insurer as provided by Section 5.078(a), Property Code, not later than January 1, 2002.

The amendment was read.

On motion of Senator Moncrief, the Senate concurred in the House amendment to SB 198 by a viva voce vote.

SENATE BILL 261 WITH HOUSE AMENDMENT

Senator Bernsen called SB 261 from the President's table for consideration of the House amendment to the bill.

The President laid the bill and the House amendment before the Senate.

Amendment

Amend SB 261 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the warnings pet stores must provide concerning reptile-associated salmonellosis; providing an administrative penalty.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Chapter 81, Health and Safety Code, is amended by adding Subchapter I to read as follows:

SUBCHAPTER I. ANIMAL-BORNE DISEASES

Sec. 81.351.  DEFINITION. In this subchapter, "pet store" means a retail store that sells animals as pets.

Sec. 81.352.  WARNING SIGN REQUIRED; RULES. (a) The owner or operator of a pet store that sells reptiles shall:

(1)  post a sign warning of reptile-associated salmonellosis in accordance with department rules; and

(2)  ensure that a written warning related to reptile-associated salmonellosis is provided to each purchaser of a reptile.

(b)  The department shall adopt rules to govern:

(1)  the form and content of the sign required by Subsection (a) and the manner and place of posting of the sign; and

(2)  the form and content of the written warning required by Subsection (a).

Sec. 81.353.  ADMINISTRATIVE PENALTY. (a) The department may assess an administrative penalty if a person violates this section or a rule adopted under this section.

(b)  In determining the amount of the penalty, the department shall consider:

(1)  the person's previous violations;

(2)  the seriousness of the violation;

(3)  any hazard to the health and safety of the public;

(4)  the person's demonstrated good faith; and

(5)  such other matters as justice may require.

(c)  The penalty may not exceed $500 for each month a violation continues.

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(d)  The enforcement of the penalty may be stayed during the time the order is under judicial review if the person pays the penalty to the clerk of the court or files a supersedeas bond with the court in the amount of the penalty. A person who cannot afford to pay the penalty or file the bond may stay the enforcement by filing an affidavit in the manner required by the Texas Rules of Civil Procedure for a party who cannot afford to file security for costs, subject to the right of the board to contest the affidavit as provided by those rules.

(e)  The attorney general may sue to collect the penalty.

(f)  A proceeding to impose the penalty is considered to be a contested case under Chapter 2001, Government Code.

SECTION 2.  This Act takes effect September 1, 2001.

The amendment was read.

On motion of Senator Bernsen, the Senate concurred in the House amendment to SB 261 by a viva voce vote.

SENATE BILL 507 WITH HOUSE AMENDMENTS

Senator Carona called SB 507 from the President's table for consideration of the House amendments to the bill.

The President laid the bill and the House amendments before the Senate.

Amendment

Amend SB 507 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to residential subdivisions that require membership in a property owners' association.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Title 11, Property Code, is amended by adding Chapter 209 to read as follows:

CHAPTER 209. TEXAS RESIDENTIAL

PROPERTY OWNERS PROTECTION ACT

Sec. 209.001.  SHORT TITLE.   This chapter may be cited as the Texas Residential Property Owners Protection Act.

Sec. 209.002.  DEFINITIONS.   In this chapter:

(1)  "Assessment" means a regular assessment, special assessment, or other amount a property owner is required to pay a property owners' association under the dedicatory instrument or by law.

(2)  "Board" means the governing body of a property owners' association.

(3)  "Declaration" means an instrument filed in the real property records of a county that includes restrictive covenants governing a residential subdivision.

(4)  "Dedicatory instrument" means each governing instrument covering the establishment, maintenance, and operation of a residential subdivision. The term includes restrictions or similar instruments subjecting property to restrictive covenants, bylaws, or similar instruments governing the administration or operation of a property owners' association, to properly adopted rules and regulations of the

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property owners' association, and to all lawful amendments to the covenants, bylaws, rules, or regulations.

(5)  "Lot" means any designated parcel of land located in a residential subdivision, including any improvements on the designated parcel.

(6)  "Owner" means a person who holds record title to property in a residential subdivision and includes the personal representative of a person who holds record title to property in a residential subdivision.

(7)  "Property owners' association" or "association" means an incorporated or unincorporated association that:

(A)  is designated as the representative of the owners of property in a residential subdivision;

(B)  has a membership primarily consisting of the owners of the property covered by the dedicatory instrument for the residential subdivision; and

(C)  manages or regulates the residential subdivision for the benefit of the owners of property in the residential subdivision.

(8)  "Regular assessment" means an assessment, a charge, a fee, or dues that each owner of property within a residential subdivision is required to pay to the property owners' association on a regular basis and that is designated for use by the property owners' association for the benefit of the residential subdivision as provided by the restrictions.

(9)  "Residential subdivision" or "subdivision" means a subdivision, planned unit development, townhouse regime, or similar planned development in which all land has been divided into two or more parts and is subject to restrictions that:

(A)  limit a majority of the land subject to the dedicatory instruments, excluding streets, common areas, and public areas, to residential use for single-family homes, townhomes, or duplexes only;

(B)  are recorded in the real property records of the county in which the residential subdivision is located; and

(C)  require membership in a property owners' association that has authority to impose regular or special assessments on the property in the subdivision.

(10)  "Restrictions" means one or more restrictive covenants contained or incorporated by reference in a properly recorded map, plat, replat, declaration, or other instrument filed in the real property records or map or plat records. The term includes any amendment or extension of the restrictions.

(11)  "Restrictive covenant" means any covenant, condition, or restriction contained in a dedicatory instrument, whether mandatory, prohibitive, permissive, or administrative.

(12)  "Special assessment" means an assessment, a charge, a fee, or dues, other than a regular assessment, that each owner of property located in a residential subdivision is required to pay to the property owners' association, according to procedures required by the dedicatory instruments, for:

(A)  defraying, in whole or in part, the cost, whether incurred before or after the assessment, of any construction or reconstruction, unexpected repair, or replacement of a capital improvement in common areas owned by the property owners' association, including the necessary fixtures and personal property related to the common areas;

(B)  maintenance and improvement of common areas owned by the property owners' association; or

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(C)  other purposes of the property owners' association as stated in its articles of incorporation or the dedicatory instrument for the residential subdivision.

Sec. 209.003.  APPLICABILITY OF CHAPTER. (a)  This chapter applies only to a residential subdivision that is subject to restrictions or provisions in a declaration that authorize the property owners' association to collect regular or special assessments on all or a majority of the property in the subdivision.

(b)  This chapter applies only to a property owners' association that requires mandatory membership in the association for all or a majority of the owners of residential property within the subdivision subject to the association's dedicatory instruments.

(c)  This chapter applies to a residential property owners' association regardless of whether the entity is designated as a "homeowners' association," "community association," or similar designation in the restrictions or dedicatory instrument.

(d)  This chapter does not apply to a condominium development governed by Chapter 82.

Sec. 209.004.  MANAGEMENT CERTIFICATES. (a)  A property owners' association shall record in each county in which any portion of the residential subdivision is located a management certificate, signed and acknowledged by an officer or the managing agent of the association, stating:

(1)  the name of the subdivision;

(2)  the name of the association;

(3)  the recording data for the subdivision;

(4)  the recording data for the declaration;

(5)  the mailing address of the association or the name and mailing address of the person managing the association; and

(6)  other information the association considers appropriate.

(b)  The property owners' association shall record an amended management certificate not later than the 30th day after the date the association has notice of a change in any information in the recorded certificate required by Subsection (a).

(c)  The property owners' association and its officers, directors, employees, and agents are not subject to liability to any person for a delay in recording or failure to record a management certificate, unless the delay or failure is wilful or caused by gross negligence.

Sec. 209.005.  ASSOCIATION RECORDS. (a)  A property owners' association shall make the books and records of the association, including financial records, reasonably available to an owner in accordance with Section B, Article 2.23, Texas Non-Profit Corporation Act (Article 1396-2.23, Vernon's Texas Civil Statutes).

(b)  An attorney's files and records relating to the association, excluding invoices requested by an owner under Section 209.008(d), are not:

(1)  records of the association;

(2)  subject to inspection by the owner; or

(3)  subject to production in a legal proceeding.

Sec. 209.006.  NOTICE REQUIRED BEFORE ENFORCEMENT ACTION. (a)  Before a property owners' association may suspend an owner's right to use a common area, file a suit against an owner other than a suit to collect a regular or special assessment or foreclose under an association's lien, charge an owner for property damage, or levy a fine for a violation of the restrictions or bylaws or rules of the association, the association or its agent must give written notice to the owner.

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(b)  The notice must:

(1)  describe the violation or property damage that is the basis for the suspension action, charge, or fine and state any amount due the association from the owner; and

(2)  inform the owner that the owner:

(A)  is entitled to a reasonable period to cure the violation and avoid the fine or suspension unless the owner was given notice and a reasonable opportunity to cure a similar violation within the preceding 12 months; and

(B)  may request a hearing under Section 209.007 on or before the 30th day after the date the owner receives the notice.

Sec. 209.007.  HEARING BEFORE BOARD; ALTERNATIVE DISPUTE RESOLUTION. (a)  If the owner is entitled to an opportunity to cure the violation, the owner has the right to submit a written request for a hearing to discuss and verify facts and resolve the matter in issue before a committee appointed by the board of the property owners' association or before the board if the board does not appoint a committee.

(b)  If a hearing is to be held before a committee, the notice prescribed by Section 209.006 must state that the owner has the right to appeal the committee's decision to the board by written notice to the board.

(c)  The association shall hold a hearing under this section not later than the 30th day after the date the board receives the owner's request for a hearing and shall notify the owner of the date, time, and place of the hearing not later than the 10th day before the date of the hearing. The board or the owner may request a postponement, and, if requested, a postponement shall be granted for a period of not more than 10 days. Additional postponements may be granted by agreement of the parties. The owner or the association may make an audio recording of the meeting.

(d)  The notice and hearing provisions of Section 209.006 and this section do not apply if the association files a suit seeking a temporary restraining order or temporary injunctive relief or files a suit that includes foreclosure as a cause of action. If a suit is filed relating to a matter to which those sections apply, a party to the suit may file a motion to compel mediation. The notice and hearing provisions of Section 209.006 and this section do not apply to a temporary suspension of a person's right to use common areas if the temporary suspension is the result of a violation that occurred in a common area and involved a significant and immediate risk of harm to others in the subdivision. The temporary suspension is effective until the board makes a final determination on the suspension action after following the procedures prescribed by this section.

(e)  An owner or property owners' association may use alternative dispute resolution services.

Sec. 209.008.  ATTORNEY'S FEES. (a)  A property owners' association may collect reimbursement of reasonable attorney's fees and other reasonable costs incurred by the association relating to collecting amounts, including damages, due the association for enforcing restrictions or the bylaws or rules of the association only if the owner is provided a written notice that attorney's fees and costs will be charged to the owner if the delinquency or violation continues after a date certain.

(b)  An owner is not liable for attorney's fees incurred by the association relating to a matter described by the notice under Section 209.006 if the attorney's fees are incurred before the conclusion of the hearing under Section 209.007 or, if the owner

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does not request a hearing under that section, before the date by which the owner must request a hearing. The owner's presence is not required to hold a hearing under Section 209.007.

(c)  All attorney's fees, costs, and other amounts collected from an owner shall be deposited into an account maintained at a financial institution in the name of the association or its managing agent. Only members of the association's board or its managing agent or employees of its managing agent may be signatories on the account.

(d)  On written request from the owner, the association shall provide copies of invoices for attorney's fees and other costs relating only to the matter for which the association seeks reimbursement of fees and costs.

(e)  The notice provisions of Subsection (a) do not apply to a counterclaim of an association in a lawsuit brought against the association by a property owner.

(f)  The amount of attorney's fees that a property owners' association may include in an indebtedness covered by a property owners' association's assessment lien is limited to the greater of:

(1)  one-third of the amount of all actual costs and assessments, excluding attorney's fees, plus interest and court costs, if those amounts are permitted to be included by law or by the restrictive covenants governing the property; or

(2)  $2,500.

(g)  Subsection (f) does not prevent a property owners' association from recovering or collecting attorney's fees in excess of the amounts prescribed by Subsection (f) by other means provided by law.

Sec. 209.009.  FORECLOSURE SALE PROHIBITED IN CERTAIN CIRCUMSTANCES. A property owners' association may not foreclose a property owners' association's assessment lien if the debt securing the lien consists solely of:

(1)  fines assessed by the association; or

(2)  attorney's fees incurred by the association solely associated with fines assessed by the association.

Sec. 209.010.  NOTICE AFTER FORECLOSURE SALE. (a) A property owners' association that conducts a foreclosure sale of an owner's lot must send to the lot owner, by certified mail, return receipt requested, not later than the 30th day after the date of the foreclosure sale a written notice stating the date and time the sale occurred and informing the lot owner of the owner's right to redeem the property under Section 209.011.

(b)  The notice must be sent by certified mail, return receipt requested, to the property owner's last known mailing address, as reflected in the records of the property owners' association.

(c)  Not later than the 30th day after the date the association sends the notice required by Subsection (a), the association must record an affidavit in the real property records of the county in which the lot is located, stating the date on which the notice was sent and containing a legal description of the lot. Any person is entitled to rely conclusively on the information contained in the recorded affidavit.

(d)  The notice requirements of this section also apply to the sale of an owner's lot by a sheriff or constable conducted as provided by a judgment obtained by the property owners' association.

Sec. 209.011.  RIGHT OF REDEMPTION AFTER FORECLOSURE. (a) A property owners' association or other person who purchases property at a sale foreclosing a property owners' association's assessment lien must commence and

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prosecute a forcible entry and detainer action under Chapter 24 to recover possession of the property.

(b)  The owner of property in a residential subdivision may redeem the property from any purchaser at a sale foreclosing a property owners' association's assessment lien not later than the earlier of:

(1)  the 90th day after the date the owner is served with citation in a forcible entry and detainer action; or

(2)  the second anniversary of the date of the foreclosure sale.

(c)  A person who purchases property at a sale foreclosing a property owners' association's assessment lien may not transfer ownership of the property to a person other than a redeeming lot owner during the redemption period.

(d)  To redeem property purchased by the property owners' association at the foreclosure sale, the lot owner must pay to the association:

(1)  all amounts due the association at the time of the foreclosure sale;

(2)  interest from the date of the foreclosure sale to the date of redemption on all amounts owed the association at the rate stated in the dedicatory instruments for delinquent assessments or, if no rate is stated, at an annual interest rate of 10 percent;

(3)  costs incurred by the association in foreclosing the lien and conveying the property to the redeeming lot owner, including reasonable attorney's fees;

(4)  any assessment levied against the property by the association after the date of the foreclosure sale;

(5)  any reasonable cost incurred by the association, including mortgage payments and costs of repair, maintenance, and leasing of the property; and

(6)  the purchase price paid by the association at the foreclosure sale less any amounts due the association under Subdivision (1) that were satisfied out of foreclosure sale proceeds.

(e)  To redeem property purchased at the foreclosure sale by a person other than the property owners' association, the lot owner:

(1)  must pay to the association:

(A)  all amounts due the association at the time of the foreclosure sale less the foreclosure sales price received by the association from the purchaser;

(B)  interest from the date of the foreclosure sale through the date of redemption on all amounts owed the association at the rate stated in the dedicatory instruments for delinquent assessments or, if no rate is stated, at an annual interest rate of 10 percent;

(C)  costs incurred by the association in foreclosing the lien and conveying the property to the redeeming lot owner, including reasonable attorney's fees;

(D)  any unpaid assessments levied against the property by the association after the date of the foreclosure sale; and

(E)  taxable costs incurred in a proceeding brought under Subsection (a); and

(2)  must pay to the person who purchased the property at the foreclosure sale:

(A)  any assessments levied against the property by the association after the date of the foreclosure sale and paid by the purchaser;

(B)  the purchase price paid by the purchaser at the foreclosure sale;

(C)  the amount of the deed recording fee;

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(D)  the amount paid by the purchaser as ad valorem taxes, penalties, and interest on the property after the date of the foreclosure sale;

(E)  taxable costs incurred in a proceeding brought under Subsection (a); and

(F)  a redemption premium of 25 percent of the aggregate total of the amount paid under Paragraphs (A)-(E).

(f)  If a lot owner redeems the property under this section, the purchaser of the property at foreclosure shall immediately execute and deliver to the owner a deed transferring the property to the redeeming lot owner. If a purchaser fails to comply with this section, the lot owner may file a cause of action against the purchaser and may recover reasonable attorney's fees from the purchaser if the lot owner is the prevailing party in the action.

(g)  If, before the expiration of the redemption period, the redeeming lot owner fails to record the deed from the foreclosing purchaser or fails to record an affidavit stating that the lot owner has redeemed the property, the lot owner's right of redemption as against a bona fide purchaser or lender for value expires after the redemption period.

(h)  The purchaser of the property at the foreclosure sale or a person to whom the person who purchased the property at the foreclosure sale transferred the property may presume conclusively that the lot owner did not redeem the property unless the lot owner files in the real property records of the county in which the property is located:

(1)  a deed from the purchaser of the property at the foreclosure sale; or

(2)  an affidavit that:

(A)  states that the lot owner has redeemed the property; and

(B)  contains a legal description of the property.

(i)  If the property owners' association purchases the property at foreclosure, all rent and other income collected by the association from the date of the foreclosure sale to the date of redemption shall be credited toward the amount owed the association under Subsection (d), and if there are excess proceeds, they shall be refunded to the lot owner. If a person other than the association purchases the property at foreclosure, all rent and other income collected by the purchaser from the date of the foreclosure sale to the date of redemption shall be credited toward the amount owed the purchaser under Subsection (e), and if there are excess proceeds, those proceeds shall be refunded to the lot owner.

(j)  If a person other than the property owners' association is the purchaser at the foreclosure sale, before executing a deed transferring the property to the redeeming lot owner, the purchaser shall obtain an affidavit from the association or its authorized agent stating that all amounts owed the association under Subsection (e) have been paid. The association shall provide the purchaser with the affidavit not later than the 10th day after the date the association receives all amounts owed to the association under Subsection (e). Failure of a purchaser to comply with this subsection does not affect the validity of a redemption by a redeeming lot owner.

(k)  Property that is redeemed remains subject to all liens and encumbrances on the property before foreclosure. Any lease entered into by the purchaser of property at a sale foreclosing an assessment lien of a property owners' association is subject to the right of redemption provided by this section and the lot owner's right to reoccupy the property immediately after the redemption.

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(l)  If a lot owner makes partial payment of amounts due the association at any time before the redemption period expires but fails to pay all amounts necessary to redeem the property before the redemption period expires, the association shall refund any partial payments to the lot owner by mailing payment to the owner's last known address as shown in the association's records not later than the 30th day after the expiration date of the redemption period.

(m)  If a lot owner sends by certified mail, return receipt requested, a written request to redeem the property on or before the last day of the redemption period, the lot owner's right of redemption is extended until the 10th day after the date the association and any third party foreclosure purchaser provides written notice to the lot owner of the amounts that must be paid to redeem the property.

(n)  After the redemption period and any extended redemption period provided by Subsection (m) expires, the association or third party foreclosure purchaser shall record an affidavit in the real property records of the county in which the property is located stating that the lot owner did not redeem the property during the redemption period or any extended redemption period.

(o)  The association or the person who purchased the property at the foreclosure sale may file an affidavit in the real property records of the county in which the property is located that states the date the citation was served under Subsection (b)(1) and contains a legal description of the property. Any person may rely conclusively on the information contained in the affidavit.

(p)  The rights of a lot owner under this section also apply if the sale of the lot owner's property is conducted by a constable or sheriff as provided by a judgment obtained by the property owners' association.

Sec. 209.012.  POWERS OF PROPERTY OWNERS' ASSOCIATION. In addition to other powers granted by law, a property owners' association subject to this chapter may:

(1)  impose fines on property owners for littering within the subdivision;

(2)  prohibit property owners from keeping animals on property within the subdivision that disrupt the quiet enjoyment of other property owners within the subdivision;

(3)  impose fines on property owners for keeping animals prohibited by the restrictions governing the subdivision on property within the subdivision; and

(4)  remove or authorize the removal of an animal described by Subdivision (2) or (3) from property within the subdivision.

SECTION 2. This Act takes effect January 1, 2002.

Floor Amendment No. 1

Amend CSSB 507 as follows:

(1) In SECTION 1 of the bill, at the end of the heading to added Chapter 209, Property Code (House Committee Report, page 1, lines 7-8) insert "OR WINONAH BLEVINS RESIDENTIAL PROPERTY OWNERS PROTECTION ACT".

(2) In SECTION 1 of the bill, in added Section 209.001, Property Code, between "Texas Residential Property Owners Protection Act" and the period (House Committee Report, page 1, line 10), insert "or Winonah Blevins Residential Property Owners Protection Act".

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Floor Amendment No. 2

Amend CSSB 507 as follows:

(1)  In SECTION 1 of the bill, in added Section 209.002(8), Property Code (House Committee Report, page 3, line 1), between "the" and "restrictions", insert "original".

(2)  In SECTION 1 of the bill, in added Section 209.002(10), Property Code (House Committee Report, page 3, line 18), between "records" and the period, insert "that are approved by the owners who own in the aggregate at least 75 percent of the lots in the residential subdivision or that are approved in accordance with the restrictions governing the residential subdivision".

(3)  In SECTION 1 of the bill, in added Section 209.006, Property Code (House Committee Report, page 6, line 15), between "owner" and the period, insert "by certified mail, return receipt requested".

(4)  In SECTION 1 of the bill, add a new Section 209.014, Property Code (House Committee Report, page 17, between lines 9 and 10), to read as follows:

Sec. 209.014.  APPROVAL FOR REGULAR AND SPECIAL ASSESSMENTS; DURATION OF ASSESSMENTS. (a) Unless otherwise provided by the restrictions or the property owners' association's articles of incorporation or bylaws, before a regular or special assessment may take effect:

(1)  the association shall provide to the property owners in the residential subdivision notice and an opportunity to be heard; and

(2)  the assessment must be approved by the owners who own in the aggregate at least 75 percent of the lots in the residential subdivision.

(b)  A special assessment may not be assessed for a period greater than one year.

Floor Amendment No. 3

Amend CSSB 507 as follows:

(1)  In SECTION 1 of the bill, in added Section 209.006(b)(2)(A), Property Code (House Committee Report, page 6, lines 22-24), strike "unless the owner was given notice and a reasonable opportunity to cure a similar violation within the preceding 12 months".

(2)  In SECTION 1 of the bill, in added Section 209.011(d)(3), Property Code (House Committee Report, page 11, line 27), strike "including reasonable" and substitute "excluding".

(3)  In SECTION 1 of the bill, in added Section 209.011(e)(1)(C), Property Code (House Committee Report, page 12, line 24), strike "including reasonable" and substitute "excluding".

(4)  In SECTION 1 of the bill, add a new Section 209.013, Property Code (House Committee Report, page 17, between lines 9 and 10) to read as follows:

Sec. 209.013.  EXTENSION OF, ADDITION TO, OR MODIFICATION OF RESTRICTIONS; PENALTY. (a) Unless otherwise provided by the restrictions or the property owners' association's articles of incorporation or bylaws, before the extension of, addition to, or modification of the restrictions governing a residential subdivision may take effect:

(1)  the association shall provide to the property owners in the residential subdivision notice and an opportunity to be heard; and

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(2)  the extension of, addition to, or modification of the restrictions must be approved by the owners who own in the aggregate at least 75 percent of the lots in the residential subdivision.

(b)  A member of the governing board of the association who violates Subsection (a) is subject to a civil penalty in an amount not to exceed $5,000 for each violation.

Floor Amendment No. 4

Amend CSSB 507, in SECTION 1 of the bill, as follows:

(1) In added Section 209.006(a), Property Code (house committee report, page 6, line 12), between "lien," and "charge", insert "or".

(2) In added Section 209.006(a), Property Code (house committee report, page 6, lines 13-14), strike "or levy a fine for a violation of the restrictions or bylaws or rules of the association,".

Floor Amendment No. 5

Amend CSSB 507 as follows:

(1)  In SECTION 1 of the bill, in added Section 209.009, Property Code, (House Committee Report, page 9, line 24), between the period and "A" insert "(a)".

(2)  In SECTION 1 of the bill, in added Section 209.009, Property Code, (House Committee Report, page 10, between lines 2 and 3), insert the following:

(b)  A property owner may cure a default in the payment of assessments at any time before the foreclosure sale of the property. If the property owner initiates a payment plan, all proceedings to foreclose the property are stayed for so long as the property owner continues to make timely payments under the payment plan.

Floor Amendment No. 6

Amend CSSB 507 as follows:

(1) On page 9, line 24, between "CIRCUMSTANCES." and "A property," insert "(a)".

(2) At the end of Subsection 209.009, add:

"(b) A property owners' association shall not conduct a foreclosure sale of the lot unless a designated member of the board of the association has made a personal visit to the owner and explained the board's intent to foreclose and offered the owner the opportunity to rectify the dispute. The designated member must make at least three personal visit attempts. The personal visit by the designated member shall be accompanied by simultaneous hand-delivery of a written notice stating the association's intent to foreclose and the opportunity to rectify. The written notice must be signed and dated by the owner and shall be retained in the association's records. The association shall provide the owner a copy of the signed notice not later than the seventh day after the date of the visit. Failure to provide a copy of the signed notice to the owner in the manner described renders the association's foreclosure power invalid until an additional personal visit is made and an additional written notice is signed and dated by the owner and a copy of the signed notice is provided to the owner in the manner described.

(c) If the owner refuses to sign the written notice, the designated member shall sign and have notarized an affidavit stating the date upon which the personal visit with the owner occurred and that the owner refused to sign the written notice. The affidavit shall be retained in the association's records.

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(d) If the personal visit attempts are unsuccessful or if the owner is absent from the property, the designated member must make at least three attempts to contact the owner by telephone. If the designated member successfully contacts the owner by phone, a personal visit must be scheduled and administered in compliance with Subsections (b) and (c). If the attempts to contact the owner by telephone are unsuccessful or the owner is absent for a personal visit scheduled by telephone, the designated member shall leave a copy of the written notice affixed to the front door of the residence. The designated member shall sign and have notarized an affidavit stating the dates upon which the personal visit attempts were made, the dates upon which the telephone contacts were attempted, the date upon which the personal visit scheduled by telephone was to have occurred, and the date upon and the time at which the written notice was attached to the front door of the residence. The affidavit shall be retained in the association's records."

Floor Amendment No. 7

Amend CSSB 507 as follows:

(1)  In SECTION 1 of the bill, in added Chapter 209, Property Code, add a new Section 209.010 to read as follows and renumber existing sections and cross-references in the chapter appropriately:

Sec. 209.010.  REIMBURSEMENT FOLLOWING FORECLOSURE OF LIEN FOR NONPAYMENT OF ASSESSMENTS. (a) This section applies to a property owners' association that forecloses a lien on a lot to secure payment of assessments owed to the association by the owner.

(b)  If a property owners' association authorizes a foreclosure sale of a lot, the association shall establish a minimum bid price and may not sell the property for less than the minimum bid price. The minimum bid price shall be the greater of:

(1)  80 percent of the value of the property according to the most recent appraisal by the appraisal district established for the county in which the property is located, minus:

(A)  the amount owing on any liens of record against the property; and

(B)  the amount of any taxes owing on the property, whether or not the taxes are delinquent; or

(2)  the amount owed on the debt for which the sale is authorized plus any expenses expected to be attributed to the sale.

(c)  In establishing the minimum bid price under Subsection (b), the property owners' association may use any amount applicable under Subsection (b) on or after the 20th day before the date the association mails notice of sale to the owner.

(d)  The property owners' association shall mail a preforeclosure notice to the owner not later than the 60th day before the date the notice of sale under Subsection (c) is mailed to the owner. The preforeclosure notice must:

(1)  inform the owner that the property owners' association:

(A)  intends to foreclose the association's lien on the property; and

(B)  will establish a minimum bid price for the foreclosure sale;

(2)  request the owner to provide documentary evidence to the association regarding the existence and amount of any lien on the property;

(3)  state that if the requested documentary evidence is provided on or before the 40th day after the date the notice is mailed, the minimum bid price will be the greater of:

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(A)  80 percent of the value of the property according to the most recent appraisal by the appraisal district established for the county in which the property is located, minus:

(i)  the amount owing on any liens of record against the property; and

(ii)  the amount of any taxes owing on the property, whether or not the taxes are delinquent; or

(B)  the amount owed on the debt for which the sale is authorized plus any expenses expected to be attributed to the sale;

(4)  state that if the owner does not provide the requested documentary evidence on or before the 40th day after the date the notice is mailed or provides incomplete information and there are any liens of record against the property, the association may establish a minimum bid price that is the amount owed for the debt for which the sale is authorized plus any expenses expected to be attributed to the sale;

(5)  provide the name and address of the person to whom the requested documentary evidence may be provided; and

(6)  state the amount the association claims is owed on the debt for which the foreclosure sale will be authorized and the amount the association will add for expenses.

(e)  The owner has the burden of ensuring that any documentary evidence reaches the person designated in the preforeclosure notice within the period prescribed by Subsection (d).

(f)  The property owners' association has the burden of:

(1)  checking the real property records of the county in which all or part of the property is located to determine whether a lien of record has been filed on the property; and

(2)  obtaining a statement of the appraised value of the property from the appraisal district established for the county in which the property is located.

(g)  If the real property to be sold under this section is the principal residence of the owner, not later than the 20th day after the date the preforeclosure notice is mailed, the property owners' association shall make a reasonable attempt to contact the owner in person to advise the owner regarding the information required to be in the preforeclosure notice. An attempt to contact the owner must be made by a member of the governing body of the association. If no contact is made, the association must make at least three attempts to contact the owner by telephone and three attempts to contact the owner in person at the owner's residence. If the attempts to contact the owner by telephone and in person are not successful, a member of the governing body of the association shall leave an additional copy of the preforeclosure notice affixed to the front door of the residence.

(h)  If the property owners' association finds no liens of record filed on the property to be sold, the minimum bid price is 80 percent of the appraised value of the property according to the most recent appraisal by the appraisal district established for the county in which the property is located. If the association finds a lien of record filed on the property and provides a preforeclosure notice as prescribed by this section, and the owner fails to respond to the notice in the period prescribed by Subsection (d):

(1)  it is conclusively presumed that the amount owed on the lien equals or exceeds the difference between 80 percent of the appraised value of the property and the amount owed on the debt for which the sale is authorized plus any expenses expected to be attributed to the sale; and

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(2)  the minimum bid price may be established as the amount owed on the debt for which the sale is authorized plus any expenses expected to be attributed to the sale.

(i)  A person does not have a cause of action against a property owners' association for the association's failure to establish a lower minimum bid price.

(j)  The owner has a cause of action against the property owners' association for damages caused by the association's failure to set a greater minimum bid price as prescribed by this section. Damages under this subsection are limited to the difference between the greater minimum bid price that the association should have established under this section and the amount owed on the debt for which the sale is authorized plus the expenses of the sale. The owner is also entitled to recover reasonable attorney's fees.

(k)  If no other bidder bids the minimum bid price, the property owners' association may hold the property and must resell the property for a price that equals or exceeds the minimum bid price. If the property is held by the association as provided by this subsection and the property was the principal residence of the owner at the time the preforeclosure notice was mailed, the owner may continue to reside on the property until the closing on the resale of the property if all mortgage or other lien payments are current and no taxes owed on the property are delinquent.

(l)  If the owner continues to reside on the property after the foreclosure sale, the property owners' association may charge a reasonable rent to be deducted from the amount owed the owner at the time of the resale. If the owner does not pay all mortgage and other lien payments and taxes when due, the association may evict the owner.

(m)  When the property is sold to a buyer other than the property owners' association, the proceeds shall be applied in the following priority:

(1)  expenses of the sale;

(2)  the amount owed on the debt for which the sale was authorized;

(3)  any assessments that accrued against the property after the sale was authorized;

(4)  the remainder, if any, to be paid to the owner.

(n)  Assessments continue to accrue against the property after a foreclosure sale, regardless of who owns the property.

(o)  If the owner continues to live on the property after a foreclosure sale as provided by Subsection (k), the owner is responsible for reasonable maintenance of the property. The property owners' association is entitled to make an inspection of the property at a reasonable time on or before the 10th day after the date of the foreclosure sale and once every 60 days thereafter. If the owner does not reasonably maintain the property in a condition as good as or better than the condition of the property on the date of the foreclosure sale, the association may make the needed repairs or maintenance and deduct the reasonable cost of the repairs or maintenance from the amount due the owner at the time of resale.

(p)  If the property is held by the property owners' association as provided by Subsection (k) and the property is the principal residence of the owner at the time the preforeclosure notice is mailed and the owner is evicted from the property, on or before the first anniversary of the date the owner moved from the property, the association shall pay the owner:

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(1)  the full amount due the owner from a resale; or

(2)  if the property is not resold, the full amount that would have been due the owner if a resale had been made for the minimum bid price.

(2)  Add the following appropriately numbered SECTION and renumber existing SECTIONS of the bill appropriately:

SECTION _____. Section 209.010, Property Code, as added by this Act, applies to a foreclosure sale conducted on or after January 1, 2001.

Floor Amendment No. 8

Amend CSSB 507 as follows:

On page 11, lines 5 and 6, strike "not later than the earlier of" and substitute "until the later of".

Floor Amendment No. 9

Amend CSSB 507 as follows:

On page 13, strike lines 8-9.

Floor Amendment No. 10

Amend CSSB 507 in SECTION 1 of the bill by striking added Section 209.012, Property Code (House Committee Report, page 16, lines 23-27 and page 17, lines 1-9).

Floor Amendment No. 11

Amend CSSB 507 on page 17 by inserting the following between lines 9 and 10:

Sec. 209.013.  SPECIAL ASSESSMENTS. A property owners' association may not levy a special assessment unless the levy is approved by a vote of the property owners in the residential subdivision who own, in the aggregate, over 50 percent of the total number of lots in the subdivision.

Floor Amendment No. 13

Amend CSSB 507 in SECTION 1 of the bill by adding Section 209.013 to read as follows:

Sec. 209.013. ASSESSMENT PROHIBITED. An association may not impose an individual assessment on an individual unit owner on space owned by the individual unit owner that is not air conditioned if:

(1) the space is part of the structural integrity of a common area or garage; and

(2) the association does not provide services to the space.

Floor Amendment No. 14

Amend CSSB 507 as follows:

(1) In SECTION 1 of the bill add Section 209.014 to read as follows:

Sec. 209.014. ALLOCATION OF PARKING SPACES. (a) If a dedicatory instrument of a property owners' association allocates parking spaces to owners by easement or fee title, the association shall ensure that each owner maintains the owner's original parking spaces and the number and type of parking spaces designated by the dedicatory instrument.

(b) An owner is entitled to only the number and type of parking spaces designated by the dedicatory instrument.

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(c) If the owner is allocated fewer parking spaces than the number of parking spaces designated by the dedicatory instrument, the association shall provide the owner with additional parking spaces in the number designated.

(d) If the dedicatory instrument of an association permits the subdivision or merger of units, the association may not deny permission to an owner to subdivide or merge units on the basis that no parking space would be assigned to the resulting unit or units.

Floor Amendment No. 15

Amend CSSB 507 in SECTION 1 of the bill by adding Section 209.015 to read as follows:

Sec. 209.015. APPLICABILITY. Sections 209.013 and 209.014 apply only to a condominium development governed by Chapter 82.

Floor Amendment No. 16

Amend CSSB 507 by adding the following appropriately numbered SECTION and renumbering existing SECTIONS of the bill appropriately:

SECTION _____. (a) In this section, "property owners' association" and "subdivision" have the meaning assigned by Section 209.002, Property Code.

(b) On or after September 1, 2001, and before September 1, 2003, a property owners' association may not forclose a lien on residential property located within the subdivision whose owners are represented by the association.

(c) This section does not apply to a condominium development governed by Chapter 82, Property Code.

Floor Amendment No. 17

Amend CSSB 507 by striking SECTION 2 of the bill (Committee printing page 17, line 10) and substituting the following:

SECTION 2. Section 209.011, Property Code, as added by this Act, applies to a foreclosure sale conducted on or after January 1, 2001.

SECTION 3. This Act takes effect immediately if it receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this Act takes effect September 1, 2001.

The amendments were read.

Senator Carona moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed.

The President asked if there were any motions to instruct the conference committee on SB 507 before appointment.

There were no motions offered.

The President announced the appointment of the following conferees on the part of the Senate on the bill: Senators Carona, Chair; Ellis, Armbrister, Madla, and Shapiro.

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SENATE BILL 310 WITH HOUSE AMENDMENTS

Senator Harris called SB 310 from the President's table for consideration of the House amendments to the bill.

The President laid the bill and the House amendments before the Senate.

Amendment

Amend SB 310 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the continuation and functions of the Railroad Commission of Texas.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Articles 6445a, 6447, 6447b, 6447c, and 6447h, Revised Statutes, are amended to read as follows:

Art. 6445a.  SUNSET PROVISION. The Railroad Commission of Texas is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the commission is abolished September 1, 2013 [2001 ].

Art. 6447.  THE COMMISSION. Election.—The Railroad Commission of Texas shall be composed of three members, one of whom shall be elected biennially at each general election for a term of six years.

Qualifications.—The members shall be resident citizens of this State, and qualified voters under the Constitution and laws, and not less than twenty-five years of age. The members are subject to the provisions of Chapter 572, Government Code, that apply to elected officers, including the requirements governing personal financial statements, standards of conduct, and conflicts of interest. [No member shall be directly or indirectly interested in any railroad, or in any stock, bond, mortgage, security, or earnings of any railroad, and should a member voluntarily become so interested his office shall become vacant, or should he become so interested otherwise than voluntarily, he shall within a reasonable time divest himself of such interest, failing to do this, his office shall become vacant.

[Shall hold no other office, etc.—No commissioner shall hold any other office of any character, while such commissioner, nor engage in any occupation or business inconsistent with his duties as such commissioner. ]

Oath, etc.—Before entering upon the duties of his office, each commissioner shall take and subscribe to the official oath and shall in addition thereto[, ] swear that he [is not directly or indirectly interested in any railroad, nor in the bonds, stock, mortgages, securities, contracts, or earnings of any railroad, and that he ] will to the best of his ability faithfully and justly execute and enforce the provisions of this title[, ] and all laws of this State concerning railroads, which oath shall be filed with the Secretary of State.

Organization.—The commissioners shall elect one of their number chairman. They may make all rules necessary for their government and proceedings. They shall be known collectively as the "Railroad Commission of Texas," and shall have a seal, a star of five points with the words "Railroad Commission of Texas" engraved thereon. They shall be furnished necessary furniture, stationery, supplies and all necessary expenses, to be paid for on the order of the Governor.

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Expenses.—The Commissioners shall receive from the State their necessary traveling expenses while traveling on the business of the Commission, which shall include the cost only of transportation while traveling on business for the Commission, upon an itemized statement thereof, sworn to by the party who incurred the expense, and approved by the Commission. Employees of the Commission are entitled to reimbursement for expenses incurred in traveling on the business of the Commission as provided by the General Appropriations Act.

Sessions.—The Commission may hold its sessions at any place in this State when deemed necessary.

Art. 6447b.  EQUAL EMPLOYMENT OPPORTUNITY [EMPLOYEE PERFORMANCE ]. (a) The commission [or its designee shall develop an intra-agency career ladder program, one part of which shall be the intra-agency posting of all nonentry level positions for at least 10 days before any public posting.

[(b)  The commission or its designee shall develop a system of annual performance evaluations based on measurable job tasks. All merit pay for commission employees must be based on the system established under this subsection.

[(c)  The commission ] shall prepare and maintain a written policy statement that implements [plan to assure implementation of ] a program of equal employment opportunity to ensure that [whereby ] all personnel decisions [transactions ] are made without regard to race, color, disability, sex, religion, age, or national origin.

(b)  The policy statement must [plan shall ] include:

(1)  personnel policies, including policies relating to [plans for ] recruitment, evaluation, selection, [appointment, ] training, and promotion of personnel, that show the intent of the commission to avoid the unlawful employment practices described by Chapter 21, Labor Code; and

(2)  an analysis of the extent to which the composition of the commission's personnel is in accordance with state and federal law and a description of reasonable methods to achieve compliance with state and federal law.

(c)  The policy statement must:

(1)  be updated annually;

(2)  be reviewed by the state Commission on Human Rights for compliance with Subsection (b) of this article; and

(3)  be filed with the governor's office[, and other personnel practices. The plan shall also include steps reasonably designed to overcome any identified under-utilization of minorities and women in the commission's work force and shall include objectives and goals, timetables for achieving those objectives and goals, and assignments of responsibility for their completion. The plan shall be filed with the governor's office within 60 days after the effective date of this section, cover an annual period, and be updated at least annually. Progress reports shall be submitted to the governor's office within 30 days of November 1 and April 1 of each year and shall include the steps the commission has taken within the reporting period to comply with this requirement of this section ].

Art. 6447c.  CONFLICT OF INTEREST. (a) In this section, "Texas trade association" means a cooperative and voluntarily joined association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest.

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(b)  A person may not be an employee of the commission employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) and its subsequent amendments, if:

(1)  the person is an officer, employee, or paid consultant of a Texas trade association in a business or industry regulated by the commission; or

(2)  the person's spouse is an officer, manager, or paid consultant of a Texas [An employee of the commission may not be an officer, employee, or paid consultant of a ] trade association in a business or industry regulated by the commission.

(c) [(b) ]  A person who is required to register as a lobbyist under Chapter 305, Government Code, may not act as the general counsel to the commission.

(d) [(c) ]  The commission[, as often as necessary, ] shall provide to members of the commission and to agency employees, as often as necessary, information regarding the requirements for office or employment under this chapter, including information regarding a person's [employees' ] responsibilities under applicable laws relating to standards of conduct for state officers or employees.

Art. 6447h.  COMPLAINTS. (a) The commission shall maintain a [keep an information ] file on [about ] each written complaint filed with the commission. The file must include:

(1)  the name of the person who filed the complaint;

(2)  the date the complaint is received by the commission;

(3)  the subject matter of the complaint;

(4)  the name of each person contacted in relation to the complaint;

(5)  a summary of the results of the review or investigation of the complaint; and

(6)  an explanation of the reason the file was closed, if the commission closed the file without taking action other than to investigate the complaint.

(b)  The commission shall provide to the person filing the complaint and to each person who is a subject of the complaint a copy of the commission's policies and procedures relating to complaint investigation and resolution.

(c)  The [relating to a person who has a license, permit, or certificate of public convenience and necessity from the commission.

[(b)  If a written complaint is filed with the commission relating to a person who has a license, permit, or certificate of public convenience and necessity from the ] commission, at least [as frequently as ] quarterly [and ] until final disposition of the complaint, [the commission ] shall notify the person filing [parties to ] the complaint and each person who is a subject of the complaint of the status of the investigation [complaint ] unless the notice would jeopardize an undercover investigation. [This section does not apply to complaints under Chapter 91, Natural Resources Code. ]

SECTION 2. Title 112, Revised Statutes, is amended by adding Articles 6447k, 6447l, 6447m, and 6447n to read as follows:

Art. 6447k.  SEPARATION OF POLICY-MAKING AND MANAGEMENT RESPONSIBILITIES. The commission shall develop and implement policies that clearly separate the policy-making responsibilities of the members of the commission and the management responsibilities of the staff of the commission.

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Art. 6447l.  PUBLIC PARTICIPATION. The commission shall develop and implement policies that provide the public with a reasonable opportunity to appear before the commission and to speak on any issue under the jurisdiction of the commission.

Art. 6447m.  EMPLOYEE INCENTIVE PROGRAM. The commission shall provide to commission employees information and training on the benefits and methods of participation in the state employee incentive program.

Art. 6447n.  METHOD OF MAKING PAYMENTS TO COMMISSION. (a) The commission may authorize payment, as prescribed by the commission, of regulatory fees, fines, penalties, and charges for goods and services by means of an electronic payment method or a credit card issued by a financial institution chartered by a state or the United States or issued by a nationally recognized credit organization approved by the commission. A payment by the authorized method may be made in person, by telephone, or through the Internet.

(b)  The commission may require a person who makes a payment to the commission by means of an electronic payment method or credit card to pay a discount or service charge in an amount reasonable and necessary to reimburse the commission for the costs involved in processing the payment.

(c)  The commission may adopt rules as necessary to implement this article.

SECTION 3. Section 81.0521, Natural Resources Code, is amended by amending Subsection (a) and adding Subsection (c) to read as follows:

(a)  With each application for an exception to any commission rule contained in Chapter 3 of Part I of Title 16 of the Texas Administrative Code, the applicant shall submit to the commission a fee of $150 [$50 ].

(c)  Two-thirds of the proceeds from this fee, including any penalties collected in connection with the fee, shall be deposited to the oil-field cleanup fund as provided by Section 91.111.

SECTION 4. Subsection (a), Section 81.0522, Natural Resources Code, is amended to read as follows:

(a)  With each Natural Gas Policy Act (15 U.S.C. Sections 3301-3432) application, the applicant shall submit to the commission a fee [of $50 ]. The commission shall set the application fee in an amount necessary to cover the cost of the commission's well category determination program but not to exceed $150.

SECTION 5. Section 81.0531, Natural Resources Code, is amended by amending Subsections (c) and (d) and adding Subsection (e) to read as follows:

(c)  In determining the amount of the penalty, the commission shall consider the permittee's history of previous violations, the seriousness of the violation, any hazard to the health or safety of the public, and the demonstrated good faith of the person charged. In determining the amount of the penalty for a violation of a provision of this title or a rule, order, license, permit, or certificate that relates to pipeline safety, the commission shall consider the guidelines adopted under Subsection (d).

(d)  The commission by rule shall adopt guidelines to be used in determining the amount of the penalty for a violation of a provision of this title or a rule, order, license, permit, or certificate that relates to pipeline safety. The guidelines shall include a penalty calculation worksheet that specifies the typical penalty for certain violations, circumstances justifying enhancement of a penalty and the amount of the enhancement, and circumstances justifying a reduction in a penalty and the amount of the reduction. The guidelines shall take into account:

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(1)  the permittee's history of previous violations, including the number of previous violations;

(2)  the seriousness of the violation and of any pollution resulting from the violation;

(3)  any hazard to the health or safety of the public;

(4)  the degree of culpability;

(5)  the demonstrated good faith of the person charged; and

(6)  any other factor the commission considers relevant.

(e)  A penalty collected under this section shall be deposited to the credit of the oil-field cleanup fund.

SECTION 6. Subchapter C, Chapter 81, Natural Resources Code, is amended by adding Section 81.055 to read as follows:

Sec. 81.055.  PIPELINE SYSTEM FINANCIAL RESPONSIBILITY REQUIREMENTS. (a) Not later than March 1, 2002, the commission shall:

(1)  study the desirability of requiring an owner, operator, or manager of a pipeline system to obtain liability insurance coverage, a bond, or other evidence of financial responsibility in order to protect the public from the costs resulting from a discharge from the pipeline system; and

(2)  report its findings to the legislature and make the report available to the public.

(b)  If the commission finds that adoption of such a requirement is desirable, the commission by rule may require an owner, operator, or manager of a pipeline system to obtain evidence of financial responsibility. The rules must specify the appropriate form and amount of that evidence and may require evidence of financial responsibility in different amounts for different pipeline systems, taking into consideration whether the pipeline system:

(1)  has a history of discharges or other violations of regulatory requirements; or

(2)  is located over a public drinking water supply, a natural resource, or a critical groundwater resource or near a school or populated area.

SECTION 7. Subsection (a), Section 81.116, Natural Resources Code, is amended to read as follows:

(a)  An oil-field cleanup regulatory fee is imposed on crude petroleum produced in this state in the amount of five-eighths [five-sixteenths ] of one cent on each barrel of 42 standard gallons.

SECTION 8. Subsection (a), Section 81.117, Natural Resources Code, is amended to read as follows:

(a)  An oil-field cleanup regulatory fee is imposed on gas initially produced and saved in this state in the amount of one-fifteenth [one-thirtieth ] of one cent for each thousand cubic feet.

SECTION 9. Sections 85.161 and 85.2021, Natural Resources Code, are amended to read as follows:

Sec. 85.161.  WELL OWNERS AND OPERATORS CERTIFICATES. The owner or operator of any [an oil or gas ] well subject to the jurisdiction of the commission[, before connecting with any oil or gas pipeline, ] shall secure from the commission a certificate showing compliance with the oil or gas conservation laws of the state and conservation rules and orders of the commission.

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Sec. 85.2021.  DRILLING PERMIT FEE. (a) With each application or materially amended application for a permit to drill, deepen, plug back, or reenter a well, the applicant shall submit to the commission a nonrefundable fee of:

(1)  $200 [$100 ] if the total depth of the well is 2,000 feet or less;

(2)  $225 [$125 ] if the total depth of the well is greater than 2,000 feet but less than or equal to 4,000 feet;

(3)  $250  [$150 ] if the total depth of the well is greater than 4,000 feet but less than or equal to 9,000 feet;

(4)  $300 [$200 ] if the total depth of the well is greater than 9,000 feet.

(b)  An applicant shall submit an additional nonrefundable fee of $200 when a Rule 37 spacing or a Rule 38 density exception review is requested.

(c)  An applicant shall submit an additional nonrefundable fee of $150 [$50 ] when requesting that the commission expedite the application for a permit to drill, deepen, plug back, or reenter a well.

(d) [(c) ]  With each application for an extension of time to plug a well pursuant to commission rules, an applicant shall submit to the commission a nonrefundable fee of $300 [$100 ], unless the applicant has filed a bond under Section 91.1041 or Section 91.1042 of this code.

(e) [(d) ]  All fees collected under this section shall be deposited in the state oil-field cleanup fund.

SECTION 10. Effective September 1, 2004, Subdivision (2), Subsection (a), Section 89.002, Natural Resources Code, is amended to read as follows:

(2)  "Operator" means a person who assumes responsibility for the physical operation and control of a well as shown by a form the person files with the commission and the commission approves. The commission may not require a person to assume responsibility for a well as a condition to being permitted to assume responsibility for another well. In the event of a sale or conveyance of an unplugged well or the right to operate an unplugged well, a person ceases being the operator for the purpose of Section 89.011 only if the well was in compliance with commission rules relating to safety or the prevention or control of pollution at the time of sale or conveyance and once the person who acquires the well or right to operate the well:

(A)  specifically identifies the well as a well for which the person assumes plugging responsibility on forms required and approved by the commission;

(B)  has a commission-approved organization report as required by Section 91.142;

(C)  has a commission-approved bond or letter of credit [other form of financial security ] under Sections 91.103-91.107 covering the well; and

(D)  places the well in compliance with commission rules.

SECTION 11. Subsection (c), Section 89.043, Natural Resources Code, is amended to read as follows:

(c)  Not later than [On or before ] the 30th day before the date the commission enters into a contract to plug a delinquent inactive well, the commission shall send a notice by certified mail to the operator of the well at the address last reported to the commission as required by Section 91.142 and commission rules. The notice shall direct the operator to plug the well and shall state that:

(1)  the commission may plug the well and foreclose its statutory lien under Section 89.083 unless the operator requests a hearing not later than the 10th day after the date the operator receives the notice;

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(2)  if the commission forecloses its statutory lien under Section 89.083 [plugs the well ], all well-site equipment will be presumed to have been abandoned and the commission may dispose of the equipment and hydrocarbons from the well as provided by Section 89.085;

(3)  if the commission plugs the well, the commission:

(A)  by order may require the operator to reimburse the commission for the plugging costs; or

(B)  may request the attorney general to file suit against the operator to recover those costs; [and ]

(4)  the commission has a statutory lien on all well-site equipment under Section 89.083; and

(5)  the lien described by Subdivision (4) is foreclosed by operation of law if the commission does not receive a valid and timely request for a hearing before the 15th day after the date the notice is mailed.

SECTION 12. Subsection (c), Section 89.083, Natural Resources Code, is amended to read as follows:

(c)  The lien may be foreclosed by judicial action or commission order at any time after notice and an opportunity for a hearing. If notice is mailed under Section 89.043 and if the lien is not previously foreclosed, the lien is foreclosed by operation of law on the 15th day after the date the notice is mailed unless the commission has received a valid and timely request for a hearing before that date. [The commission may foreclose on the lien by entering into a plugging contract. ] The commission is not required to give notice or an opportunity for a hearing to subordinate lienholders or nonoperators before foreclosing the lien [entering into a plugging contract ].

SECTION 13. Subsections (a), (g), and (h), Section 89.085, Natural Resources Code, are amended to read as follows:

(a)  When the commission forecloses its lien under Section 89.083 on [enters into a contract to plug ] a delinquent inactive well, well-site equipment and any amount of hydrocarbons from the well that is stored on the lease are presumed to have been abandoned and may be disposed of by the commission in a commercially reasonable manner by either or both of the following methods:

(1)  entering into a plugging contract that provides [may provide ] that the person plugging or cleaning up pollution, or both, will take title to well-site equipment, hydrocarbons from the well that are stored on the lease, or hydrocarbons recovered during the plugging operation in exchange for a sum of money deducted as a credit from the contract price; or

(2)  selling the well-site equipment, hydrocarbons from the well that are stored on the lease, or hydrocarbons recovered during the plugging operation [may be sold ] at a public auction or a public or private sale.

(g)  The notice required by Subsection (f) of this section must include [shall state ]:

(1)  the lease name;

(2)  the well number;

(3)  the county in which the well is located;

(4)  the abstract number of the property on which the lease is situated;

(5)  the commission lease or gas well identification number or drilling permit number;

(6)  a list of the property disposed of under this section; and

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(7)  a statement that any person who has a legal or equitable ownership or security interest in the equipment or hydrocarbons that was in existence on the date the commission foreclosed its statutory lien [entered into a contract to plug or clean up the well ] may file a claim with the commission.

(h)  Not later than the 180th day after the date the well-site equipment or hydrocarbons are disposed of under this section, the commission shall publish a notice that states:

(1)  the lease name;

(2)  the well number;

(3)  the county in which the well is located;

(4)  the commission lease or gas well identification number or drilling permit number; and

(5)  that equipment or hydrocarbons if applicable from the well and lease were disposed of under this section and that any person who has a legal or equitable ownership or security interest in the equipment or hydrocarbons that was in existence on the date the commission foreclosed its statutory lien [entered into a contract to plug or clean up the well ] may file a claim with the commission.

SECTION 14. Subsections (a) and (c), Section 89.086, Natural Resources Code, are amended to read as follows:

(a)  A person with a legal or equitable ownership or security interest in well-site equipment or hydrocarbons disposed of under Section 89.085 of this code may make a claim against the oil-field cleanup fund unless an element of the transaction giving rise to the interest occurs after the commission forecloses its statutory lien under Section 89.083 [enters into a plugging contract ].

(c)  A claimant must identify the well-site equipment or hydrocarbons in which the claimant has an interest and state the amount of the property interest as of the date the commission foreclosed its statutory lien under Section 89.083 [entered into the plugging contract ].

SECTION 15. Effective September 1, 2004, Section 91.103, Natural Resources Code, is amended to read as follows:

Sec. 91.103.  PERSONS REQUIRED TO EXECUTE BOND OR LETTER OF CREDIT [ALTERNATE FORM OF FINANCIAL SECURITY ]. Any person, including any firm, partnership, joint stock association, corporation, or other organization, required to file an organization report under Section 91.142 of this code shall execute and file with the commission a bond or letter of credit [alternate form of financial security ].

SECTION 16. Subsections (b) and (c), Section 91.104, Natural Resources Code, are amended to read as follows:

(b)  A person required to file a bond under Section 91.103 may choose to file:

(1)  an individual bond as provided under Section 91.1041;

(2)  a blanket bond as provided under Section 91.1042;

(3)  a letter of credit in the same amount as required for a blanket bond under Section 91.1042;

(4)  a nonrefundable annual fee of $1,000 [$100 ], if:

(A)  the commission determines that individual and blanket bonds as specified by Subdivisions (1) and (2) are not obtainable at reasonable prices; and

(B)  the person can demonstrate to the commission an acceptable record of compliance with all commission rules, orders, licenses, permits, or certificates that

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relate to safety or the prevention or control of pollution for the previous 48 months and the person and, if a firm, partnership, joint stock association, corporation, or other organization, its officers, directors, general partners, or owners of more than 25 percent ownership interest or any trustee:

(i) [(A) ]  has no outstanding violations of such commission rules, orders, licenses, permits, or certificates;

(ii) [(B) ]  has paid all administrative, civil, and criminal penalties, if any, relating to any violation of such commission rules, orders, licenses, permits, or certificates; and

(iii) [(C) ]  has paid all reimbursements of any costs and expenses incurred by the commission in relation to any violation of such commission rules, orders, licenses, permits, or certificates; or

(5) [(4) ]  a nonrefundable annual fee equal to 12-1/2 [three ] percent of the bond that otherwise would be required[; or

[(5)  to give a first lien on tangible personal property associated with oil and gas production whose salvage value equals the value of an individual bond under Section 91.1041 or the value of a blanket bond under Section 91.1042 that otherwise would be required ].

(c)  A person who chooses to file a form of financial security other than a bond or letter of credit shall also submit a fee of $300 [$100 ] for each application to extend the time to plug a well in accordance with Section 85.2021 [of this code ].

SECTION 17. Effective September 1, 2004, Section 91.104, Natural Resources Code, is amended to read as follows:

Sec. 91.104.  BONDS AND LETTERS OF CREDIT [ALTERNATE FORMS OF FINANCIAL SECURITY ]. (a) The commission shall require a bond or letter of credit [an alternate form of financial security ] to be filed with the commission as provided by Subsection (b) of this section.

(b)  A person required to file a bond under Section 91.103 may choose to file:

(1)  an individual bond as provided under Section 91.1041;

(2)  a blanket bond as provided under Section 91.1042; or

(3)  a letter of credit in the same amount as required for a blanket bond under Section 91.1042 [nonrefundable annual fee of $100, if the person can demonstrate to the commission an acceptable record of compliance with all commission rules, orders, licenses, permits, or certificates that relate to safety or the prevention or control of pollution for the previous 48 months and the person and, if a firm, partnership, joint stock association, corporation, or other organization, its officers, directors, general partners, or owners of more than 25 percent ownership interest or any trustee:

[(A)  has no outstanding violations of such commission rules, orders, licenses, permits, or certificates;

[(B)  has paid all administrative, civil, and criminal penalties, if any, relating to any violation of such commission rules, orders, licenses, permits, or certificates; and

[(C)  has paid all reimbursements of any costs and expenses incurred by the commission in relation to any violation of such commission rules, orders, licenses, permits, or certificates;

[(4)  a nonrefundable annual fee equal to three percent of the bond that otherwise would be required; or

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[(5)  to give a first lien on tangible personal property associated with oil and gas production whose salvage value equals the value of an individual bond under Section 91.1041 or the value of a blanket bond under Section 91.1042 that otherwise would be required ].

[(c)  A person who chooses to file a form of financial security other than a bond shall also submit a fee of $100 for each application to extend the time to plug a well in accordance with Section 85.2021 of this code. ]

SECTION 18. Sections 91.1041 and 91.1042, Natural Resources Code, are amended to read as follows:

Sec. 91.1041.  INDIVIDUAL BOND. (a) A person required to file a bond under Section 91.103 who operates one or more wells may file a bond in an amount equal to $2 for each foot of well depth for each well.

(b)  Notwithstanding Subsection (a), the commission by rule shall set the amount of the bond for an operator of one or more bay or offshore wells at a reasonable amount that exceeds the amount provided by Subsection (a).

Sec. 91.1042.  BLANKET BOND. (a) A person required to file a bond under Section 91.103 may file a blanket bond to cover all wells and operations for which a bond is required as follows:

(1)  a person who operates 10 or fewer wells or performs other operations shall file a $25,000 blanket bond;

(2)  a person who operates more than 10 but fewer than 100 wells shall file a $50,000 blanket bond; and

(3)  a person who operates 100 or more wells shall file a $250,000 blanket bond.

(b)  Notwithstanding Subsection (a), the commission by rule shall set the amount of the bond for an operator of bay or offshore wells at a reasonable amount that exceeds the amount provided by Subsection (a)(1), (2), or (3), as applicable.

SECTION 19. Effective September 1, 2004, Section 91.107, Natural Resources Code, is amended to read as follows:

Sec. 91.107.  NEW BOND OR LETTER OF CREDIT [ALTERNATE FORM OF FINANCIAL SECURITY ]. If a well [covered by a bond or alternate form of financial security ] is transferred, sold, or assigned by its operator, the commission shall require the party acquiring the well to file a new bond or letter of credit [alternate form of financial security ] as provided by this subchapter, and the [bond or alternate form of ] financial security of the prior operator shall continue to be required and to remain in effect until the new bond or letter of credit [alternate form of financial security ] is provided or the commission determines that the financial security previously submitted to the commission by the person acquiring the well complies with this subchapter.

SECTION 20. Section 91.111, Natural Resources Code, is amended by amending Subsections (b) and (c) and adding Subsection (e) to read as follows:

(b)  The commission shall certify to the comptroller the date on which the balance in the fund equals or exceeds $20 [$10 ] million. The oil-field cleanup regulatory fees on oil and gas shall not be collected or required to be paid on or after the first day of the second month following the certification, except that the comptroller shall resume collecting the fees on receipt of a commission certification that the fund has fallen below $10 [$6 ] million. The comptroller shall continue collecting the fees until collections are again suspended in the manner provided by this subsection.

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(c)  The fund consists of:

(1)  penalties imposed under Section 85.381 for violation of a law, order, or rule relating to well plugging requirements;

(2)  proceeds from bonds and other financial assurances required by this chapter, subject to the refund provisions of Section 91.1091;

(3)  private contributions, including contributions made under Section 89.084;

(4)  expenses collected under Section 89.083;

(5)  fees imposed under Section 85.2021;

(6)  civil penalties collected for violations of Chapter 89 or of rules or orders relating to plugging that are adopted under this code;

(7)  proceeds collected under Sections 89.085 and 91.115;

(8)  interest earned on the funds deposited in the fund;

(9)  fees collected under Section 91.104;

(10)  civil penalties or costs recovered under Section 91.457 or 91.459;

(11)  oil and gas waste hauler permit application fees collected under Section 29.015, Water Code;

(12)  costs recovered under Section 91.113(f);

(13)  hazardous oil and gas waste generation fees collected under Section 91.605;

(14)  oil-field cleanup regulatory fees on oil collected under Section 81.116;

(15)  oil-field cleanup regulatory fees on gas collected under Section 81.117;

(16)  fees for a reissued certificate collected under Section 85.167;

(17)  fees collected under Section 91.1013;

(18)  fees collected under Section 89.088;

(19)  penalties collected under Section 81.0531; [and ]

(20)  fees collected under Section 91.142;

(21)  fees collected under Section 91.653;

(22)  costs recovered under Sections 91.655 and 91.656;

(23)  two-thirds of the fees collected under Section 81.0521; and

(24)  legislative appropriations.

(e)  The commission, through the legislative appropriations request process, shall establish specific performance goals for the oil-field cleanup fund for the next biennium, including goals for the number of:

(1)  site investigations and environmental assessments to be conducted;

(2)  abandoned wells to be plugged; and

(3)  surface locations to be remediated.

SECTION 21. Section 91.112, Natural Resources Code, is amended to read as follows:

Sec. 91.112.  PURPOSE OF THE FUND. (a) Money in the fund may be used by the commission or its employees or agents for:

(1)  conducting a site investigation or environmental assessment to determine:

(A)  the nature and extent of contamination caused by oil and gas wastes or other substances or materials regulated by the commission under Section 91.101; and

(B)  the measures that should be taken to control or clean up the wastes, substances, or materials described in Paragraph (A);

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(2)  controlling or cleaning up oil and gas wastes or other substances or materials regulated by the commission under Section 91.101 that are causing or are likely to cause the pollution of surface or subsurface water, consistent with Section 91.113;

(3)  plugging abandoned wells and administering or enforcing permits, orders, and rules relating to the commission's authority to prevent pollution under this chapter, Chapter 89, or any other law administered or enforced by the commission under Title 3;

(4)  implementing Subchapter N and enforcing rules, orders, and permits adopted or issued under that subchapter; [and ]

(5)  implementing the voluntary cleanup program under Subchapter O; and

(6)  preparing the report required under Subsection (b).

(b)  The commission shall submit to the legislature and make available to the public, annually, a report that reviews the extent to which money provided under Section 91.111 has enabled the commission to better protect the environment and enhance the income of the oil-field cleanup fund. The report shall include:

(1)  the number of wells plugged, by region;

(2)  the number of wells abandoned, by region;

(3)  the number of inactive wells not currently in compliance with commission rules, by region;

(4)  the status of enforcement proceedings for all wells in violation of commission rules and the time period during which the wells have been in violation, by region in which the wells are located;

(5)  the number of surface locations remediated, by region;

(6)  a detailed accounting of expenditures of money in the fund, including expenditures for site investigations and environmental assessments, plugging of abandoned wells, remediation of surface locations, and staff salaries and other administrative expenses;

(7)  the method by which the commission sets priorities by which it determines the order in which abandoned wells are plugged;

(8) [(6) ]  a projection of the amount of money needed for the next biennium for conducting site investigations and environmental assessments, plugging abandoned wells, and remediating surface locations; [and ]

(9) [(7) ]  the status of implementation of the provisions of Section 89.085 relating to possession and sale of equipment to recover plugging costs; and

(10)  the number of sites successfully remediated under the voluntary cleanup program under Subchapter O, by region.

SECTION 22. Subchapter D, Chapter 91, Natural Resources Code, is amended by adding Sections 91.1131 and 91.1135 to read as follows:

Sec. 91.1131.  RISK ASSESSMENT STANDARDS; PRIORITIZATION OF HIGH-RISK WELLS. (a) The commission by rule shall establish risk assessment as the guide for:

(1)  conducting site investigations and environmental assessments; and

(2)  controlling and cleaning up oil and gas wastes and other substances and materials.

(b)  Rules adopted under this section must provide for:

(1)  determining whether an actual or potential risk exists at a site;

(2)  screening contaminants at the site to identify those that pose a risk;

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(3)  developing cleanup standards based on contamination levels that are protective of human health and the environment; and

(4)  establishing a reporting mechanism for informing the commission regarding specific remediation activities.

(c)  The commission by rule shall develop a system for:

(1)  identifying abandoned wells that pose a high risk of contaminating surface water or groundwater;

(2)  periodically testing high-risk wells by conducting a fluid level test or, if necessary, a pressure test; and

(3)  giving priority to plugging high-risk wells with compromised casings.

Sec. 91.1135.  OIL-FIELD CLEANUP FUND ADVISORY COMMITTEE. (a) In this section, "committee" means the Oil-Field Cleanup Fund Advisory Committee.

(b)  The committee is composed of 10 members as follows:

(1)  the presiding officer of the senate committee with primary jurisdiction over matters affecting natural resources;

(2)  the presiding officer of the house committee with primary jurisdiction over matters affecting energy resources;

(3)  one public member appointed by the governor;

(4)  one member appointed by the lieutenant governor from the academic field of geology or economics;

(5)  one member appointed by the speaker of the house of representatives from the academic field of geology or economics; and

(6)  the executive officer, or a person designated by the executive officer, of each of the following organizations:

(A)  the Texas Oil and Gas Association;

(B)  the Texas Independent Producers and Royalty Owners Association;

(C)  the Panhandle Producers and Royalty Owners Association;

(D)  the Permian Basin Petroleum Association; and

(E)  the Alliance of Energy Partners.

(c)  An appointed member of the committee serves at the will of the authority that appointed the member.

(d)  The committee shall:

(1)  meet at least quarterly with the commission;

(2)  receive information about rules proposed by the commission relating to the oil-field cleanup fund;

(3)  review recommendations for legislation proposed by the commission; and

(4)  monitor the effectiveness of the oil-field cleanup fund.

(e)  The commission shall provide quarterly reports to the committee and the Legislative Budget Board that include:

(1)  the following information with respect to the period since the last report was provided as well as cumulatively:

(A)  the amount of money deposited in the oil-field cleanup fund;

(B)  the amount of money spent from the fund;

(C)  the balance of the fund;

(D)  the number of wells plugged with money from the fund;

(E)  the number of sites remediated with money from the fund; and

(F)  the number of wells abandoned; and

(2)  any additional information or data requested in writing by the committee.

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(f)  The committee may:

(1)  submit to the commission comments of the committee regarding proposed rules relating to the oil-field cleanup fund; and

(2)  request reports and other information from the commission as necessary to implement this section.

(g)  Not later than November 15 of each even-numbered year, the committee shall report to the governor, lieutenant governor, and speaker of the house of representatives on the committee's activities. The report must include:

(1)  an analysis of any problems with the administration of the oil-field cleanup fund; and

(2)  recommendations for any legislation needed to address any problems identified with the administration of the fund or otherwise needed to further the purposes of the fund.

SECTION 23. Section 91.142, Natural Resources Code, is amended by adding Subsection (g) to read as follows:

(g)  An organization report filed under this section must be accompanied by the following fee:

(1)  for an operator of not more than 25 wells, $300;

(2)  for an operator of more than 25 but not more than 100 wells, $500;

(3)  for an operator of more than 100 wells, $1,000;

(4)  for an operator of one or more natural gas pipelines as classified by the commission, $100;

(5)  for an operator of one or more service activities or facilities, including liquids pipelines as classified by the commission, who does not operate any wells, an amount determined by the commission but not less than $300 or more than $500; and

(6)  for an operator of one or more service activities or facilities, including liquids pipelines as classified by the commission, who also operates one or more wells, an amount determined by the commission based on the sum of the amounts provided by the applicable subdivisions of this subsection but not less than $300 or more than $1,000.

SECTION 24. Subsections (a) and (b), Section 91.1013, Natural Resources Code, are amended to read as follows:

(a)  With each application for a fluid injection well permit, the applicant shall submit to the commission a nonrefundable fee of $200 [$100 ]. In this section, "fluid injection well" means any well used to inject fluid or gas into the ground in connection with the exploration or production of oil or gas other than an oil and gas waste disposal well regulated by the commission pursuant to Chapter 27, Water Code.

(b)  With each application for a permit to discharge to surface water under this chapter and commission rules, other than a permit for a discharge that meets National Pollutant Discharge Elimination System requirements for agricultural or wildlife use, the applicant shall submit to the commission a nonrefundable fee of $300 [$200 ].

SECTION 25. Chapter 91, Natural Resources Code, is amended by adding Subchapter O to read as follows:

SUBCHAPTER O. RAILROAD COMMISSION

VOLUNTARY CLEANUP PROGRAM

Sec. 91.651.  DEFINITIONS. In this subchapter:

(1)  "Contaminant" includes a waste, pollutant, or substance regulated by, or that results from an activity under the jurisdiction of, the commission under this chapter, Chapter 141 of this code, or Chapter 27, Water Code.

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(2)  "Environmental assessment" means the assessment described by Section 91.653.

(3)  "Response action" means the cleanup or removal of a contaminant from the environment.

(4)  "Voluntary cleanup" means a response action taken under and in compliance with this subchapter.

Sec. 91.652.  ELIGIBILITY FOR VOLUNTARY CLEANUP PROGRAM. (a) Any site that is contaminated with a contaminant is eligible for participation in the voluntary cleanup program except the portion of a site that may be subject to a commission order.

(b)  A person electing to participate in the voluntary cleanup program must:

(1)  enter into a voluntary cleanup agreement as provided by Section 91.655; and

(2)  pay all costs of commission oversight of the voluntary cleanup.

Sec. 91.653.  APPLICATION TO PARTICIPATE IN VOLUNTARY CLEANUP PROGRAM. (a) A person who desires to participate in the voluntary cleanup program under this subchapter must submit to the commission an application and an application fee as prescribed by this section.

(b)  An application submitted under this section must:

(1)  be on a form provided by the commission;

(2)  contain:

(A)  general information concerning:

(i)  the person and the person's capability, including the person's financial capability, to perform the voluntary cleanup;

(ii)  the site; and

(iii)  the name, address, and telephone number of all surface and mineral owners;

(B)  other background information requested by the commission;

(C)  an environmental assessment of the actual or threatened release of the contaminant at the site; and

(D)  if the person applying is not the surface owner, written authorization from the surface owner agreeing to the applicant's participation in the program;

(3)  be accompanied by an application fee of $1,000; and

(4)  be submitted according to schedules set by the commission.

(c)  The environmental assessment required by Subsection (b) must include:

(1)  a legal description of the site;

(2)  a description of the physical characteristics of the site;

(3)  the operational history of the site to the extent that history is known by the applicant;

(4)  information of which the applicant is aware concerning the nature and extent of any relevant contamination or release at the site and immediately contiguous to the site, or wherever the contamination came to be located; and

(5)  relevant information of which the applicant is aware concerning the potential for human exposure to contamination at the site.

(d)  An application shall be processed in the order in which it is received.

(e)  Fees collected under this section shall be deposited to the credit of the oil-field cleanup fund under Section 91.111.

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Sec. 91.654.  REJECTION OF APPLICATION. (a) The commission may reject an application submitted under Section 91.653 if:

(1)  a state or federal enforcement action is pending that concerns the remediation of the contaminant described in the application;

(2)  a federal grant requires an enforcement action at the site;

(3)  the application is incomplete or inaccurate; or

(4)  the site is ineligible under Section 91.652.

(b)  If an application is rejected because it is incomplete or inaccurate, the commission, not later than the 45th day after receipt of the application, shall provide the person with a list of all information needed to make the application complete or accurate. A person may resubmit an application once without submitting an additional application fee if the person resubmits the application not later than the 45th day after the date the commission issues notice that the application has been rejected.

(c)  If the commission rejects the application, the commission shall:

(1)  notify the person that the application has been rejected;

(2)  explain the reasons for rejection of the application; and

(3)  inform the person that the commission will refund half the person's application fee unless the person indicates a desire to resubmit the application.

Sec. 91.655.  VOLUNTARY CLEANUP AGREEMENT. (a) Before the commission evaluates any plan or report detailing the remediation goals and proposed methods of remediation, the person desiring to participate in the voluntary cleanup program must enter into a voluntary cleanup agreement that sets forth the terms and conditions of the evaluation of the reports and the implementation of work plans.

(b)  A voluntary cleanup agreement must provide for:

(1)  recovery by the commission of all reasonable costs:

(A)  incurred by the commission in review and oversight of the person's work plan and reports and as a result of the commission's field activities;

(B)  attributable to the voluntary cleanup agreement; and

(C)  in excess of the amount of fees submitted by the applicant under Section 91.653;

(2)  a schedule of payments to the commission to be made by the person for recovery of all commission costs fairly attributable to the voluntary cleanup program, including direct and indirect costs of overhead, salaries, equipment, and utilities, and legal, management, and support costs; and

(3)  appropriate tasks, deliverables, and schedules.

(c)  The voluntary cleanup agreement shall:

(1)  identify all statutes and rules with which the person must comply;

(2)  describe any work plan or report to be submitted for review by the commission, including a final report that provides all information necessary to verify that all work contemplated by the voluntary cleanup agreement has been completed;

(3)  include a schedule for submitting the information required by Subdivision (2); and

(4)  state the technical standards to be applied in evaluating the work plans and reports, with reference to the proposed future land use to be achieved.

(d)  If an agreement is not reached between a person desiring to participate in the voluntary cleanup program and the commission on or before the 30th day after good faith negotiations have begun:

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(1)  the person or the commission may withdraw from the negotiations; and

(2)  the commission retains the person's application fee.

(e)  The commission may not initiate an enforcement action against a person who is in compliance with this section for the contamination or release that is the subject of the voluntary cleanup agreement or for activity that resulted in the contamination or release.

Sec. 91.656.  TERMINATION OF AGREEMENT; COST RECOVERY. (a) The commission or the person in its sole discretion may terminate the agreement by giving 15 days' advance written notice to the other. Only those costs incurred or obligated by the commission before notice of termination of the agreement are recoverable under the agreement if the agreement is terminated.

(b)  Termination of the agreement does not affect any right the commission has under other law to recover costs.

(c)  If the person does not pay to the commission the state's costs associated with the voluntary cleanup before the 31st day after the date the person receives notice that the costs are due and owing, the attorney general, at the request of the commission, shall bring an action in the name of the state in Travis County to recover the amount owed and reasonable legal expenses, including attorney's fees, witness costs, court costs, and deposition costs.

Sec. 91.657.  VOLUNTARY CLEANUP WORK PLANS AND REPORTS. (a) After signing a voluntary cleanup agreement, the person shall prepare and submit the appropriate work plans and reports to the commission.

(b)  The commission shall review and evaluate the work plans and reports for accuracy, quality, and completeness. The commission may approve a voluntary cleanup work plan or report or, if a work plan or report is not approved, notify the person concerning additional information or commitments needed to obtain approval.

(c)  At any time during the evaluation of a work plan or report, the commission may request the person to submit additional or corrected information.

(d)  After considering future land use, the commission may approve work plans and reports submitted under this section that do not require removal or remedy of all discharges, releases, and threatened releases at a site if the partial response actions for the property:

(1)  will be completed in a manner that protects human health and the environment;

(2)  will not cause, contribute, or exacerbate discharges, releases, or threatened releases that are not required to be removed or remedied under the work plan; and

(3)  will not interfere with or substantially increase the cost of response actions to address the remaining discharges, releases, or threatened releases.

Sec. 91.658.  CERTIFICATE OF COMPLETION. (a) If the commission determines that a person has successfully completed a voluntary cleanup approved under this subchapter, the commission shall certify that the action has been completed by issuing the person a certificate of completion.

(b)  The certificate of completion must:

(1)  acknowledge the protection from liability provided by Section 91.659;

(2)  indicate the proposed future land use; and

(3)  include a legal description of the site and the name of the site's surface and mineral owner and mineral operator at the time the application to participate in the voluntary cleanup program was filed.

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(c)  If the commission determines that the person has not successfully completed a voluntary cleanup approved under this subchapter, the commission shall notify of this determination the person who undertook the voluntary cleanup and the current surface and mineral owner and mineral operator of the site that is the subject of the cleanup.

Sec. 91.659.  PERSONS RELEASED FROM LIABILITY. (a) A person who is not a responsible person under Section 91.113 at the time the person applies to perform a voluntary cleanup:

(1)  does not become a responsible person solely because the person signs the application; and

(2)  is released, on certification under Section 91.658, from all liability to the state for cleanup of areas of the site covered by the certification, except for releases and consequences that the person causes.

(b)  A person who is not a responsible person under Section 91.113 at the time the commission issues a certificate of completion under Section 91.658 is released, on issuance of the certificate, from all liability to the state for cleanup of areas of the site covered by the certificate, except for releases and consequences that the person causes.

(c)  The release from liability provided by this section does not apply to a person who:

(1)  caused or contributed to the contamination at the site covered by the certificate;

(2)  acquires a certificate of completion by fraud, misrepresentation, or knowing failure to disclose material information;

(3)  knows at the time the person acquires an interest in the site for which the certificate of completion was issued that the certificate was acquired in a manner provided by Subdivision (2); or

(4)  changes land use from the use specified in the certificate of completion if the new use may result in increased risks to human health or the environment.

Sec. 91.660.  PERMIT NOT REQUIRED. (a) A state or local permit is not required for removal or remedial action conducted on a site as part of a voluntary cleanup under this subchapter. A person shall coordinate a voluntary cleanup with ongoing federal and state hazardous waste programs.

(b)  The commission by rule shall require that the person conducting the voluntary cleanup comply with any federal or state standard, requirement, criterion, or limitation to which the remedial action would otherwise be subject if a permit were required.

SECTION 26. Sections 113.011, 113.014, 113.015, 113.0511, and 113.082, Natural Resources Code, are amended to read as follows:

Sec. 113.011.  REGULATION OF LIQUEFIED PETROLEUM GAS ACTIVITIES. The commission shall administer and enforce the laws of this state and the rules and standards of the commission relating to liquefied petroleum gas [DIVISION. There is created and organized a separate and distinct division of the commission known as the liquefied petroleum gas division or the LPG division ].

Sec. 113.014.  EMPLOYEES. Sufficient employees shall be provided [to the LPG division ] for the enforcement of this chapter.

Sec. 113.015.  FUNDS FOR FINANCING REGULATION OF LPG ACTIVITIES [DIVISION ]. The commission shall look only to the revenue derived from the operation of this chapter and appropriated by the legislature for expenses of regulating [conducting the ] liquefied petroleum gas activities [division ] and administering this

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chapter. [The LPG examination fund is established in the state treasury to be used to pay the costs of training, including examinations, seminars, and continuing education programs, administered or sponsored by the commission pursuant to Sections 113.087 and 113.088 of this code. All fees collected pursuant to Sections 113.088 and 113.090(c) of this code relating to training or registration for qualification to perform LPG-related activities shall be credited to this fund. There is hereby appropriated from the fund to the commission all such fees collected. ]

Sec. 113.0511.  LIMITATIONS ON RULEMAKING AUTHORITY. (a) The commission may not adopt rules restricting advertising or competitive bidding [or advertising ] by a licensee [person regulated by the commission ] except to prohibit false, misleading, or deceptive practices [by the person ].

(b)  In its [The commission may not include in any ] rules to prohibit false, misleading, or deceptive practices, the commission may not include [by a person regulated by the commission ] a rule that:

(1)  restricts the [person's ] use of any medium for advertising;

(2)  restricts the use of a licensee's [person's ] personal appearance or [use of his ] voice in an advertisement;

(3)  relates to the size or duration of an advertisement by the licensee [person ]; or

(4)  restricts the licensee's [person's ] advertisement under a trade name.

Sec. 113.082.  CATEGORIES OF LPG ACTIVITIES [LICENSEE ]; FEES. (a) A prospective licensee in LPG may apply to the commission [LPG division ] for a license to engage in any one or more of the following categories of LPG activities:

(1) [(A) ]  container manufacturers/fabricators: the manufacture, fabrication, assembly, repair, installation, subframing, testing, and sale of LPG containers, including LPG motor or mobile fuel containers and systems, and the repair and installation of transport and transfer systems[; and the category "A" application and original license fee is an amount not to exceed $1,000 as determined by the commission; the annual renewal license fee is an amount not to exceed $600 as determined by the commission ];

(2) [(B) ]  transport outfitters: the subframing, testing, and sale of LPG transport containers, the testing of LPG storage containers, the installation, testing, and sale of LPG motor or mobile fuel containers and systems, and the installation and repair of transport systems, and motor or mobile fuel systems[; the category "B" application and original license fee is an amount not to exceed $400 as determined by the commission; the annual renewal license fee is an amount not to exceed $200 as determined by the commission ];

(3) [(C) ]  carriers: the transportation of LPG by transport, including the loading and unloading of LPG, and the installation and repair of transport systems[; the category "C" application and original license fee is an amount not to exceed $1,000 as determined by the commission; the annual renewal license fee is an amount not to exceed $300 as determined by the commission ];

(4) [(D) ]  general installers and repairmen: the sale, service, and installation of containers, excluding motor fuel containers, and the service, installation, and repair of piping, certain appliances as defined by rule, excluding recreational vehicle appliances and LPG systems, excluding motor fuel and recreational vehicle systems[; the category "D" application and original license fee is an amount not to exceed $100 as determined by the commission; the annual renewal license fee is an amount not to exceed $70 as determined by the commission ];

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(5) [(E) ]  retail and wholesale dealers: the storage, sale, transportation, and distribution of LPG at retail and wholesale, and all other activities included in this section except the manufacture, fabrication, assembly, repair, subframing, and testing of LPG containers, and except the sale and installation of LPG motor or mobile fuel systems that have an engine with a rating of more than 25 horsepower[; the category "E" application and original license fee is an amount not to exceed $750 as determined by the commission; the annual renewal license fee is an amount not to exceed $300 as determined by the commission ];

(6) [(F) ]  cylinder filling: the operation of a cylinder-filling facility, including cylinder filling, the sale of LPG in cylinders, and the replacement of a cylinder valve[; the category "F" application and original license fee is an amount not to exceed $100 as determined by the commission; the annual renewal license fee is an amount not to exceed $50 as determined by the commission ];

(7) [(G) ]  service station: the operation of an LPG service station filling ASME containers designed for motor and mobile fuel[; the category "G" application and original license fee is an amount not to exceed $100 as determined by the commission; the annual renewal license fee is an amount not to exceed $50 as determined by the commission ];

(8) [(H) ]  cylinder dealers: the transportation and sale of LPG in cylinders[; the category "H" application and original license fee is an amount not to exceed $1,000 as determined by the commission; the annual renewal license fee is an amount not to exceed $300 as determined by the commission ];

(9) [(I) ]  service station and cylinder filling: any service station and cylinder activity set out in Subdivisions (6) and (7) [categories "F" and "G" of this section; the category "I" application and original license fee is an amount not to exceed $150 as determined by the commission; the annual renewal license fee is an amount not to exceed $70 as determined by the commission ];

(10) [(J) ]  service station and cylinder facilities: the operation of a cylinder-filling facility, including cylinder filling and the sale, transportation, installation, and connection of LPG in cylinders, the replacement of cylinder valves, and the operation of an LPG service station as set out in Subdivision (7) [category "G"; the category "J" application and original license fee is an amount not to exceed $1,000 as determined by the commission; the annual renewal license fee is an amount not to exceed $300 as determined by the commission ];

(11) [(K) ]  distribution system: the sale and distribution of LPG through mains or pipes and the installation and repair of LPG systems[; the category "K" application and original license fee is an amount not to exceed $1,000 as determined by the commission; the annual renewal license fee is an amount not to exceed $300 as determined by the commission ];

(12) [(L) ]  engine fuel: the sale and installation of LPG motor or mobile fuel containers, and the sale and installation of LPG motor or mobile fuel systems[; the category "L" application and original license fee is an amount not to exceed $100 as determined by the commission; the annual renewal license fee is an amount not to exceed $50 as determined by the commission ];

(13) [(M) ]  recreational vehicle installers and repairmen: the sale, service, and installation of recreational vehicle containers, and the installation, repair, and service of recreational vehicle appliances, piping, and LPG systems, including recreational vehicle motor or mobile fuel systems and containers[; the category "M"

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application and original license fee is an amount not to exceed $100 as determined by the commission; the annual renewal license fee is an amount not to exceed $70 as determined by the commission ];

(14) [(N) ]  manufactured housing installers and repairmen: the service and installation of containers that supply fuel to manufactured housing, and the installation, repair, and service of appliances and piping systems for manufactured housing[; the category "N" application and original license fee is an amount not to exceed $100 as determined by the commission; the annual renewal license fee is an amount not to exceed $70 as determined by the commission ];

(15) [(O) ]  testing laboratory: the testing of an LP-gas container, LP-gas motor fuel systems or mobile fuel systems, transfer systems, and transport systems for the purpose of determining the safety of the container or systems for LP-gas service, including the necessary installation, disconnection, reconnecting, testing, and repair of LPG motor fuel systems or mobile fuel systems, transfer systems, and transport systems involved in the testing of containers; [the category "O" application and original license fee is an amount not to exceed $400 as determined by the commission; the annual renewal license fee is an amount not to exceed $100 as determined by the commission; ] or

(16) [(P) ]  portable cylinder exchange: the operation of a portable cylinder exchange service, where the sale of LP-gas is within a portable cylinder with an LP-gas capacity not to exceed 21 pounds; the portable cylinders are not filled on site, and no other LP-gas activity requiring a license is conducted[; the category "P" application and original license fee is an amount not to exceed $100 as determined by the commission; the annual renewal license fee is an amount not to exceed $50 as determined by the commission ].

(b)  The commission by rule shall establish reasonable application and original license fees and renewal fees for each type of license listed in this section.

SECTION 27. Subsections (b) and (c), Section 113.084, Natural Resources Code, are amended to read as follows:

(b)  A prospective licensee shall submit the required application together with the original nonrefundable license fee established by the commission under [required by ] Section 113.082 [of this code ] for each type of license [category ] for which an [a license ] application is made. The applicant shall submit additional information and data with each application as the commission may reasonably require.

(c)  A licensee shall submit the nonrefundable renewal fee for each type of [category for which ] license [is ] sought along with information and data the commission may reasonably require.

SECTION 28. Section 113.087, Natural Resources Code, is amended by amending Subsections (b), (c), and (i) through (m) and adding Subsections (n) and (o) to read as follows:

(b)  Before license issuance, the commission shall require the individual designated as the licensee's representative to the commission to provide good and sufficient proof through examination prepared and administered by the commission of working knowledge of this chapter and rules of the commission which affect the type [category ] of license for which application is made. Thereafter, each licensee shall maintain a qualified representative at all times.

(c)  Each individual who will be actively supervising those operations requiring any license under this chapter at any outlet or location, as designated by the

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commission, shall be required to provide good and sufficient proof through examination prepared and administered by the commission that the supervisor has a working knowledge of the safety requirements and penalties in this chapter and the rules of the commission which apply to that type [category ] of license.

(i)  Not later than the 30th day after the date a person takes a licensing [on which an ] examination [is administered ] under this chapter [section ], the commission shall notify the person [each examinee ] of the results of the examination.

(j)  If the examination is graded or reviewed by a testing service:

(1)  the commission shall notify the person of the results of the examination not later than the 14th day after the date the commission receives the results from the testing service; and

(2)  if notice of the examination results will be delayed for longer than 90 days after the examination date, the commission shall notify the person [examinee ] of the reason for the delay before the 90th day.

(k)  The commission may require a testing service to notify a person of the results of the person's examination.

(l) [(j) ]  If requested in writing by a person who fails a [the ] licensing examination administered under this chapter [section ], the commission shall furnish the person with an analysis of the person's performance on the examination.

(m) [(k) ]  The commission, by appropriate rule, shall [may ] require, in addition to examination requirements as set out in Subsections (b), (c), and (d) of this section:

(1)  an examination for technical competence that is validated by a recognized educational testing organization or similar organization; or

(2)  attendance at approved academic, trade, professional, or commission-sponsored seminars, other continuing education programs, and periodic reexaminations.

(n) [(l) ]  Prior to qualifying an individual to perform LP-gas work, the commission may establish by rule an initial course of instruction for any person who has not yet passed the [category of ] examination for the LPG activity for which the person seeks qualification; for any person who has not maintained qualified status, as defined by rule; and for any person whose certification has been revoked pursuant to Subchapter F of this code. If an initial course of instruction is established by the commission, it shall be available at least once every 180 [90 ] days.

(o) [(m) ]  The commission by rule may exempt from any provision of this section:

(1)  a journeyman or master plumber licensed by the Texas State Board of Plumbing Examiners;

(2)  a person licensed under the Air Conditioning and Refrigeration Contractor License Law (Article 8861, Vernon's Texas Civil Statutes); or

(3)  company representatives, operations supervisors, or employees of a testing laboratory that was registered under Section 113.135 prior to the effective date of this subsection.

SECTION 29. Subsections (a) and (c), Section 113.089, Natural Resources Code, are amended to read as follows:

(a)  If application is made for a license under [category "E" of ] Section 113.082(a)(5) [113.082 of this code ] or for any other type of license [category ] specified by commission rule, the commission, in addition to other requirements, shall have an actual inspection conducted of any and all facilities, bulk storage equipment, transportation equipment, and dispensing equipment of the applicant to verify

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satisfactory compliance with all current safety laws, rules, and practices. The inspection may be waived by the commission on an application resulting solely from a change in legal entities under which a current licensee operates.

(c)  A [category "E" ] license under Section 113.082(a)(5) and any other type of license specified by commission rule shall not be issued until the inspection under Subsection (a) of this section verifies the applicant to be in satisfactory compliance with all current safety laws, rules, and practices.

SECTION 30. Subsections (a) and (b), Section 113.090, Natural Resources Code, are amended to read as follows:

(a)  The commission by rule may establish reasonable fees for the review of site applications [examination of plans and specifications ] related to the installation of containers when site applications [plans and specifications ] are reviewed by the commission before such installation is placed into LP-gas service.

(b)  The commission by rule may establish reasonable fees for recording the location of containers at public buildings and commercial installations when prior approval of site applications [plans and specifications ] is not required.

SECTION 31. Subsections (b), (c), and (d), Section 113.091, Natural Resources Code, are amended to read as follows:

(b)  Within 30 days of the notice of denial, an applicant for license under this chapter who is denied a license may request a hearing to determine whether or not the applicant has complied in all respects with the licensing procedure applicable to each type [the category or categories ] of license sought. The applicant's request for hearing must be in writing and delivered to the commission [director of the LP-gas division ].

(c)  A hearing to determine an applicant's compliance with the licensing procedure applicable to each type [the category or categories ] of license sought must be scheduled within 30 days following receipt of a request under Subsection (b) of this section.

(d)  If the record made at the hearing supports the applicant's claim, the commission shall enter an order in its records to that effect, noting each type of license to [the category or categories for ] which the applicant is found entitled [to be licensed ], and the commission shall have the license or licenses issued. If the applicant is found unqualified, the commission shall likewise enter an order in its records to that effect, and no license may be issued to the applicant.

SECTION 32. Section 113.093, Natural Resources Code, is amended to read as follows:

Sec. 113.093.  LICENSE RENEWAL. (a) A person who is otherwise eligible to renew a license may renew an unexpired license by paying the required [issued pursuant to this chapter is renewable on the timely payment or tender of the ] renewal [license ] fee to the commission before the expiration date of the license [each year ]. A person whose license has expired may not engage in activities that require a license until the license has been renewed.

(b)  A person whose [If a person's ] license has been expired for [not longer than ] 90 days or less[, the person ] may renew the license by paying to the commission a [the required ] renewal fee that is equal to 1-1/2 times the normally required [and a fee that is one-half of the amount of the ] renewal fee [for the license ].

(c)  A person whose [If a person's ] license has been expired for more [longer ] than 90 days but less than one year [two years, the person ] may renew the license by

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paying to the commission a [all unpaid ] renewal [fees and a ] fee that is equal to two times the normally required [the amount of the unpaid ] renewal fee [fees for the license ].

(d)  A person whose [If a person's ] license has been expired for one year [two years ] or more [longer, the person ] may not renew the license. The person may obtain a new license by complying with the requirements and procedures, including the examination requirements, for obtaining an original license.

(e)  A person who was licensed in this state, moved to another state, and is currently licensed and has been in practice in the other state for the two years preceding the date of application may obtain a new license without reexamination. The person must pay to the commission a fee that is equal to two times the normally required renewal fee for the license.

(f)  Not later than the 30th day before the date a person's license is scheduled to expire, the commission shall send written notice of the impending expiration to the person at the person's last known address according to the records of the commission.

(g)  A renewal license will be issued to a licensee as soon as is practicable after compliance with this section, and fulfillment of insurance, examination, and seminar requirements established by this chapter, and submission of any information and data the commission may reasonably require.

(h) [(f) ]  Renewal [license ] fees shall be nonrefundable.

[(g)  At least 15 days before the expiration of a person's license the commission shall notify the person in writing of the impending license expiration and shall attempt to obtain from the person a signed receipt confirming receipt of the notice. ]

SECTION 33. Subchapter D, Chapter 113, Natural Resources Code, is amended by adding Section 113.096 to read as follows:

Sec. 113.096.  PROVISIONAL LICENSE. (a) The commission may issue a provisional license to an applicant currently licensed in another jurisdiction who seeks a license in this state and who:

(1)  has been licensed in good standing for at least two years in another jurisdiction, including a foreign country, that has licensing requirements substantially equivalent to the requirements of this chapter;

(2)  has passed a national or other examination recognized by the commission relating to the activities regulated under this chapter; and

(3)  is sponsored by a person licensed by the commission under this chapter with whom the provisional license holder will practice during the time the person holds a provisional license.

(b)  The commission may waive the requirement of Subsection (a)(3) for an applicant if the commission determines that compliance with that subsection would be a hardship to the applicant.

(c)  A provisional license is valid until the date the commission approves or denies the provisional license holder's application for a license. The commission shall issue a license under this chapter to the provisional license holder if:

(1)  the provisional license holder is eligible to be licensed under Section 113.095; or

(2)  the provisional license holder:

(A)  passes the part of the examination under Section 113.087 that relates to the applicant's knowledge and understanding of the laws and rules relating to the activities regulated under this chapter in this state;

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(B)  meets the academic and experience requirements for a license under this chapter; and

(C)  satisfies any other licensing requirements under this chapter.

(d)  The commission must approve or deny a provisional license holder's application for a license not later than the 180th day after the date the provisional license is issued. The commission may extend the 180-day period if the results of an examination have not been received by the commission before the end of that period.

(e)  The commission may establish a fee for provisional licenses in an amount reasonable and necessary to cover the cost of issuing the license.

SECTION 34. Subsections (d) and (h), Section 113.097, Natural Resources Code, are amended to read as follows:

(d)  Each [category "C," "E," "H," or "J" ] licensee under Section 113.082 (a)(3), (5), (8), or (10) must carry motor vehicle bodily injury and property damage liability coverage on each motor vehicle, including trailers and semitrailers, used to transport LP-gas. The commission shall establish by rule a reasonable amount of coverage to be maintained, except that coverage shall not be less than the amounts required as evidence of financial responsibility under Chapter 601, Transportation Code.

(h)  As required by commission rule, a [category "A," "B," "C," "E," or "O" ] licensee under Section 113.082(a)(1), (2), (3), (5), or (15) must carry completed operations or products liability insurance, or both, in a reasonable amount, based on the type or types of licensed activities.

SECTION 35. Subsections (a) and (c), Section 113.098, Natural Resources Code, are amended to read as follows:

(a)  As evidence that required insurance has been secured and is in force, certificates of insurance which are approved by the commission [division ] shall be filed with the commission [division ] before licensing, license renewal, and during the entire period that the license is in effect. Any document filed with the commission [division ] in a timely manner which is not completed in accordance with the instructions indicated on the insurance certificate forms supplied by the commission [division ], but which complies with the substantive requirements of this section and with the rules adopted under this section may be considered by the commission [division ] to be evidence that required insurance has been secured and is in force for a temporary period not to exceed 45 days. During this temporary period, a licensee shall file with the commission [division ] an amended certificate of insurance which complies with all procedural and substantive requirements of this section and the rules adopted hereunder.

(c)  Cancellation of a certificate of insurance becomes effective on the occurrence of any of the following events and not before:

(1)  commission [division ] receipt of written notice stating the insurer's intent to cancel a policy of insurance and the passage of time equivalent to the notice period required by law to be given the insured before the insurance cancellation;

(2)  receipt by the commission [division ] of an acceptable replacement insurance certificate;

(3)  voluntary surrender of a license and the rights and privileges conferred by the license;

(4)  commission [division ] receipt of a statement made by a licensee stating that the licensee is not actively engaging in any operations which require a particular

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type of insurance and will not engage in those operations unless and until all certificates of required insurance applicable to those operations are filed with the commission [division ]; or

(5)  written order of commission.

SECTION 36. Subsections (a)-(d), Section 113.099, Natural Resources Code, are amended to read as follows:

(a)  A [category "C," "E," "H," or "J" ] licensee or an applicant for a license under Section 113.082(a)(3), (5), (8), or (10) that does not operate or contemplate the operation of a motor vehicle equipped with an LP-gas cargo container and does not transport or contemplate the transportation of LP-gas by vehicle in any manner, may make and file with the commission [division ] a statement to that effect in lieu of filing a certificate of motor vehicle bodily injury and property damage insurance.

(b)  A licensee or an applicant for a license that does not engage in or contemplate engaging in any operations which would be covered by general liability insurance for a period of time may make and file with the commission [division ] a statement to that effect in lieu of filing a certificate of general liability insurance.

(c)  A licensee or an applicant for a license that does not employ or contemplate the hiring of an employee or employees to be engaged in LPG-related activities in this state may make and file with the commission [division ] a statement to that effect in lieu of filing evidence of coverage of workers' compensation or other alternative form of coverage as provided in this subchapter.

(d)  A [category "A," "B," "C," "E," or "O" ] licensee or an applicant for a license under Section 113.082(a)(1), (2), (3), (5), or (15) that does not engage in or contemplate engaging in any LP-gas operations which would be covered by completed operations or products liability insurance, or both, for a period of time may make and file with the commission [division ] a statement to that effect in lieu of filing a certificate of insurance.

SECTION 37. The heading to Subchapter F, Chapter 113, Natural Resources Code, is amended to read as follows:

SUBCHAPTER F. DISCIPLINARY ACTION [SUSPENSION AND

REVOCATION OF LICENSES AND REGISTRATIONS ]

SECTION 38. Subsection (e), Section 113.161, Natural Resources Code, is amended to read as follows:

(e)  If the commission [or division ] determines that the probable violation or noncompliance constitutes an immediate danger to the public health, safety, and welfare, it shall require the immediate cessation of the probable violation or noncompliance and proceed with a hearing as provided in Section 113.162 [of this code ].

SECTION 39. Section 113.163, Natural Resources Code, is amended to read as follows:

Sec. 113.163.  FINDINGS AND JUDGMENT. (a)  The [If the ] commission shall revoke, suspend, or refuse to renew a license or registration or shall reprimand a licensee or registrant if the commission finds that the licensee or registrant has violated or failed to comply with or is violating or failing to comply with this chapter or a rule or standard promulgated and adopted under this chapter[, or both, the commission may suspend the license or registration for a definite period not to exceed 90 days or may revoke the license or registration. If the commission determines that no violation has

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occurred or is occurring, its order shall so state. Whenever a license or registration is revoked by order of the commission, a new license or registration shall not be issued for at least 90 days from the effective date of the order. Such time period shall be stated in the order ].

(b)  The commission may place on probation a person whose license or registration is [has been ] suspended. If a license or registration suspension is probated, the commission may require the person:

(1)  to report regularly to the commission on matters that are the basis of the probation;

(2)  to limit practice to the areas prescribed by the commission; or

(3)  to continue or review professional education until the person attains a degree of skill satisfactory to the commission in those areas that are the basis of the [under Subsection (a) of this section for a definite period not to exceed one year, but if the commission does place the licensee or registrant on probation and does allow him to continue to operate, the fact that the license or registration has been suspended and the licensee or registrant has been put on probation shall appear in the records of the commission relating to the suspension and ] probation.

SECTION 40. Subsection (b), Section 113.233, Natural Resources Code, is amended to read as follows:

(b)  Any authorized representative of the commission [LP-Gas Division ] may enter any buildings or premises where an accident has occurred in which LP-gas was a probable cause for purposes of investigating the cause, origin, and circumstances of such accident. The commission [LP-Gas Division ] may request that any state or local authority having jurisdiction take appropriate action, to the extent permitted by law, as may be necessary for preservation of property and premises.

SECTION 41. Subsection (b), Section 113.243, Natural Resources Code, as amended by Section 2, Chapter 496, Acts of the 75th Legislature, Regular Session, 1997, is amended to read as follows:

(b)  The fund consists of money from:

(1)  fees charged under this subchapter;

(2)  the penalties for the late payment of the fee charged under this subchapter;

(3)  gifts, grants, or other assistance received by the commission from any source for the purposes of this subchapter;

(4)  interest earned on amounts in the fund;

(5)  amounts collected by the commission under an agreement with another state in accordance with Section 113.246(e); [and ]

(6)  assessments, rebates on assessments, and other money collected by the commission under the Propane Education and Research Act of 1996 (15 U.S.C. Section 6401 et seq.) or other applicable federal law; and

(7)  fees, royalties, or other things of value received from the items described by Subsections (f)(1)(A)-(D).

SECTION 42. Section 113.243, Natural Resources Code, is amended by amending Subsections (c) and (d) and adding Subsections (f) and (g) to read as follows:

(c)  The fund may be used only by the commission to pay for activities relating to the specific fuel from which the fee, royalty, or other thing of value was derived or the

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specific fuel, if any, for which the gift, grant, or other assistance is given, including direct and indirect costs relating to:

(1)  researching all possible uses of LPG and other environmentally beneficial alternative fuels to enhance air quality;

(2)  researching, developing, and implementing marketing, advertising, and informational programs relating to alternative fuels to make alternative fuels more understandable and readily available to consumers;

(3)  developing and implementing conservation and distribution plans to minimize the frequency and severity of disruptions in the supply of alternative fuels;

(4)  developing a public information plan that will provide advisory services relating to alternative fuels to consumers;

(5)  developing voluntary participation plans to promote the use of alternative fuels by federal, state, and local agencies;

(6)  implementing consumer incentive or rebate programs developed pursuant to Section 113.2435 of this subchapter;

(7)  other functions the commission determines are necessary to add a program established by the commission for the purpose of promoting the use of LPG or other environmentally beneficial alternative fuels; and

(8)  the administrative costs incurred by the commission under this subchapter.

(d)  If a specific fee, royalty, gift, grant, other thing of value, or other assistance is designated for or collected from discrete components of the alternative fuels industry, the fee, royalty, gift, grant, other thing of value, or other assistance shall be deposited in a separate account in the fund.

(f)  The commission may:

(1)  apply for, register, secure, hold, and protect under the laws of a state, the United States, or a foreign country a patent, copyright, trademark, or other evidence of protection or exclusivity issued for an idea, publication, or other original innovation fixed in a tangible medium, including:

(A)  a logo;

(B)  a service mark;

(C)  a study;

(D)  an engineering, architectural, or graphic design;

(E)  a manual;

(F)  automated systems software;

(G)  an audiovisual work; or

(H)  a sound recording;

(2)  enter into a license agreement with a third party in return for a fee, royalty, or other thing of value; and

(3)  waive or reduce the amount of a fee, royalty, or other thing of value to be assessed if the commission determines that the waiver will:

(A)  further the goals and missions of the commission's division responsible for alternative fuels research and education; and

(B)  result in a net benefit to the state.

(g)  Money received under Subsection (f) shall be deposited in a separate account in the fund as provided by Subsection (d), except that any money received by the commission from the items described by Subsections (f)(1)(E)-(H) shall be deposited in the general revenue fund.

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SECTION 43. Subchapter J, Chapter 113, Natural Resources Code, as added by Chapter 80, Acts of the 73rd Legislature, Regular Session, 1993, is redesignated as Subchapter K, and the heading to that subchapter is amended to read as follows:

SUBCHAPTER K [J ]. LIABILITY OF LICENSE HOLDER

SECTION 44. Chapter 113, Natural Resources Code, is amended by adding Subchapter L to read as follows:

SUBCHAPTER L. TESTING OF LP-GAS SYSTEMS

IN SCHOOL FACILITIES

Sec. 113.351.  DEFINITIONS. In this subchapter:

(1)  "School district" means:

(A)  an entity created under the laws of this state and accredited by the Texas Education Agency under Subchapter D, Chapter 39, Education Code; or

(B)  a private school, other than a resident school, approved by the Texas Education Agency under Section 132.056, Education Code.

(2)  "Supplier" means an individual or company that sells and delivers liquefied petroleum gas to a school district facility. If more than one individual or company sells and delivers LP-gas to a facility of a school district, each individual or company is a supplier for purposes of this subchapter.

Sec. 113.352.  DUTY TO TEST FOR LEAKAGE. (a) Each school district shall perform pressure tests for leakage on the LP-gas piping system in each school district facility at least biennially. The tests must be performed before the beginning of the school year.

(b)  The school district may perform the pressure tests on a two-year cycle under which the tests are performed for the LP-gas piping systems of approximately one-half of the facilities each year.

(c)  If a school district operates one or more school district facilities on a year-round calendar, the pressure test in each of those facilities must be conducted and reported not later than July 1 of the year in which the test is performed.

(d)  A test performed under a municipal code satisfies the pressure testing requirements prescribed by this section.

Sec. 113.353.  REQUIREMENTS OF TEST. (a) The school district shall perform the pressure test to determine whether the LP-gas piping system holds at least the amount of pressure specified by the National Fire Protection Association 54, National Fuel Gas Code.

(b)  The pressure test must be conducted in accordance with National Fire Protection Association 54.

(c)  At the request of a school district, the commission shall assist the district in providing for the certification of an employee of the school district or school, as applicable, to conduct the test and in developing a procedure for conducting the test.

Sec. 113.354.  NOTICE OF TEST. (a) A school district shall provide written notice to the commission specifying the date and the result of each pressure test or other inspection of the LP-gas piping system.

(b)  Before the introduction of any LP-gas into the LP-gas piping system, the school district shall provide verification to the district's supplier that the piping has been tested in accordance with this subchapter.

(c)  The commission shall maintain a copy of the notice provided under Subsection (a) until at least the first anniversary of the date the commission received the notice.

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Sec. 113.355.  TERMINATION OF SERVICE. A supplier shall terminate service to a school district facility if:

(1)  the supplier receives official notification from the firm or individual conducting the test of a hazardous leakage in the facility LP-gas piping system; or

(2)  a test at the facility is not performed as required by this subchapter.

Sec. 113.356.  REPORT TO BOARD OF TRUSTEES. An identified LP-gas leakage in a school district facility shall be reported to the board of trustees of the district in which the facility is located.

Sec. 113.357.  ENFORCEMENT. The commission shall enforce this subchapter.

SECTION 45. Subchapter B, Chapter 116, Natural Resources Code, is amended by adding Section 116.016 to read as follows:

Sec. 116.016.  LIMITATIONS ON RULEMAKING AUTHORITY. (a) The commission may not adopt rules restricting advertising or competitive bidding by a licensee or registrant except to prohibit false, misleading, or deceptive practices.

(b)  In its rules to prohibit false, misleading, or deceptive practices, the commission may not include a rule that:

(1)  restricts the use of any medium for advertising;

(2)  restricts the use of a licensee or registrant's personal appearance or voice in an advertisement;

(3)  relates to the size or duration of an advertisement by the licensee or registrant; or

(4)  restricts the licensee or registrant's advertisement under a trade name.

SECTION 46. Subsection (b), Section 116.032, Natural Resources Code, is amended to read as follows:

(b)  The commission by rule may establish reasonable fees for each category of license. [A license fee may not exceed $1,000. ]

SECTION 47. Section 116.033, Natural Resources Code, is amended to read as follows:

Sec. 116.033.  APPLICATION AND RENEWAL PROCEDURES. (a) The commission shall adopt rules establishing procedures for submitting and processing applications for issuance and renewal of licenses and for registration.

(b)  A person who is otherwise eligible to renew a license or registration may renew an unexpired license or registration by paying the required renewal fee to the commission before the expiration date of the license or registration. A person whose license or registration has expired may not engage in activities that require a license or registration until the license or registration has been renewed.

(c)  A person whose license or registration has been expired for 90 days or less may renew the license or registration by paying to the commission a renewal fee that is equal to 1-1/2 times the normally required renewal fee.

(d)  A person whose license or registration has been expired for more than 90 days but less than one year may renew the license or registration by paying to the commission a renewal fee that is equal to two times the normally required renewal fee.

(e)  A person whose license or registration has been expired for one year or more may not renew the license or registration. The person may obtain a new license or registration by complying with the requirements and procedures, including the examination requirements, for obtaining an original license or registration.

(f)  A person who was licensed or registered in this state, moved to another state, and is currently licensed or registered and has been in practice in the other state for the

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two years preceding the date of application may obtain a new license or registration without reexamination. The person must pay to the commission a fee that is equal to two times the normally required renewal fee for the license or registration.

(g)  Not later than the 30th day before the date a person's license or registration is scheduled to expire, the commission shall send written notice of the impending expiration to the person at the person's last known address according to the records of the commission.

SECTION 48. Section 116.034, Natural Resources Code, is amended by adding Subsections (d)-(h) to read as follows:

(d)  Not later than the 30th day after the date a person takes a licensing or registration examination under this chapter, the commission shall notify the person of the results of the examination.

(e)  If the examination is graded or reviewed by a testing service:

(1)  the commission shall notify the person of the results of the examination not later than the 14th day after the date the commission receives the results from the testing service; and

(2)  if notice of the examination results will be delayed for longer than 90 days after the examination date, the commission shall notify the person of the reason for the delay before the 90th day.

(f)  The commission may require a testing service to notify a person of the results of the person's examination.

(g)  If requested in writing by a person who fails a licensing or registration examination administered under this chapter, the commission shall furnish the person with an analysis of the person's performance on the examination.

(h)  The commission shall recognize, prepare, or administer continuing education programs for its licensees and registrants. A licensee or registrant must participate in the programs to the extent required by the commission to keep the person's license.

SECTION 49. Subchapter C, Chapter 116, Natural Resources Code, is amended by adding Sections 116.0345 and 116.0346 to read as follows:

Sec. 116.0345.  LICENSE OR REGISTRATION BY ENDORSEMENT. The commission may waive any prerequisite to obtaining a license or registration for an applicant after reviewing the applicant's credentials and determining that the applicant holds a license or registration issued by another jurisdiction that has licensing requirements substantially equivalent to those of this state.

Sec. 116.0346.  PROVISIONAL LICENSE OR REGISTRATION. (a) The commission may issue a provisional license or registration to an applicant currently licensed or registered in another jurisdiction who seeks a license or registration in this state and who:

(1)  has been licensed or registered in good standing for at least two years in another jurisdiction, including a foreign country, that has licensing or registration requirements substantially equivalent to the requirements of this chapter;

(2)  has passed a national or other examination recognized by the commission relating to the activities regulated under this chapter; and

(3)  is sponsored by a person licensed or registered by the commission under this chapter with whom the provisional license or registration holder will practice during the time the person holds a provisional license or registration.

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(b)  The commission may waive the requirement of Subsection (a)(3) for an applicant if the commission determines that compliance with that subsection would be a hardship to the applicant.

(c)  A provisional license or registration is valid until the date the commission approves or denies the provisional license or registration holder's application for a license or registration. The commission shall issue a license or registration under this chapter to the provisional license or registration holder if:

(1)  the provisional license or registration holder is eligible to be licensed or registered under Section 116.0345; or

(2)  the provisional license or registration holder:

(A)  passes the part of the examination under Section 116.034 that relates to the applicant's knowledge and understanding of the laws and rules relating to the activities regulated under this chapter in this state;

(B)  meets the academic and experience requirements for a license or registration under this chapter; and

(C)  satisfies any other licensing or registration requirements under this chapter.

(d)  The commission must approve or deny a provisional license or registration holder's application for a license or registration not later than the 180th day after the date the provisional license or registration is issued. The commission may extend the 180-day period if the results of an examination have not been received by the commission before the end of that period.

(e)  The commission may establish a fee for provisional licenses or registrations in an amount reasonable and necessary to cover the cost of issuing the license or registration.

SECTION 50. The heading to Section 116.037, Natural Resources Code, is amended to read as follows:

Sec. 116.037.  DISCIPLINARY ACTION [SUSPENSION AND REVOCATION OF LICENSE ].

SECTION 51. Section 116.037, Natural Resources Code, is amended by amending Subsections (f) and (g) and adding Subsection (h) to read as follows:

(f)  The [If the ] commission shall revoke, suspend, or refuse to renew a license or registration or shall reprimand the licensee or registrant if the commission finds that the licensee or registrant has violated or failed to comply with or is violating or failing to comply with this chapter or a rule adopted under this chapter[, the commission may suspend the license or registration for a definite period not to exceed 90 days or may revoke the license ].

(g)  The commission may place on probation a person whose license or registration is suspended. If a license or registration suspension is probated, the commission may require the person:

(1)  to report regularly to the commission on matters that are the basis of the probation;

(2)  to limit practice to the areas prescribed by the commission; or

(3)  to continue or review professional education until the person attains a degree of skill satisfactory to the commission in those areas that are the basis of the probation.

(h)  Any party to a proceeding before the commission is entitled to judicial review under the substantial evidence rule.

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SECTION 52. Section 117.012, Natural Resources Code, is amended by adding Subsections (h)-(k) to read as follows:

(h)  The commission shall require operators or their designated representatives to communicate and conduct liaison activities with fire, police, and other appropriate public emergency response officials. The liaison activities must be conducted by meetings in person except as provided by this section. An operator or the operator's representative may conduct required community liaison activities as provided by Subsection (i) only if the operator or the operator's representative has made the following efforts to conduct a community liaison meeting in person with the officials:

(1)  mailing a written request for a meeting in person to the appropriate officials by certified mail, return receipt requested;

(2)  sending a request for a meeting in person to the appropriate officials by facsimile transmission; and

(3)  making one or more telephone calls or e-mail message transmissions to the appropriate officials to request a meeting in person.

(i)  If the operator or operator's representative cannot arrange a meeting in person after complying with Subsection (h), the operator or the operator's representative shall make the following efforts to conduct community liaison activities by means of a telephone conference call with the officials:

(1)  mailing a written request for a telephone conference to the appropriate officials by certified mail, return receipt requested;

(2)  sending a request for a telephone conference to the appropriate officials by facsimile transmission; and

(3)  making one or more telephone calls or e-mail message transmissions to the appropriate officials to request a telephone conference.

(j)  If the operator or the operator's representative has made the efforts required by Subsections (h) and (i) but has not successfully arranged a meeting in person or a telephone conference, the community liaison information required to be conveyed may be delivered by mailing the information by certified mail, return receipt requested.

(k)  The commission by rule shall require the owner or operator of each interstate or intrastate hazardous liquid or carbon dioxide pipeline facility any part of which is located within 1,000 feet of a public school to:

(1)  develop an emergency response plan in consultation with the fire department in whose jurisdiction the school is located or another local emergency response entity; and

(2)  present the plan:

(A)  at the first annual budget meeting of the board of trustees of the school district in which the school is located after the plan is developed; and

(B)  at subsequent annual budget meetings of the board of trustees of the school district on the request of the board.

SECTION 53. Subtitle D, Title 3, Natural Resources Code, is amended by adding Chapter 118 to read as follows:

CHAPTER 118. PIPELINE ASSESSMENT AND TESTING

Sec. 118.001.  AUTHORITY TO REQUIRE PLAN FOR PIPELINE ASSESSMENT OR TESTING. (a) The Railroad Commission of Texas by rule may require an operator to file for commission approval a plan for assessment or testing of a pipeline if the commission finds that:

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(1)  there is reason to believe that the pipeline may present a hazard to public health or safety;

(2)  the commission lacks adequate information to assess the risk to public health or safety presented by the pipeline; or

(3)  a plan is necessary for the commission to initiate or complete a pipeline safety investigation.

(b)  The Railroad Commission of Texas may take enforcement action against a person who fails to:

(1)  submit a required plan; or

(2)  participate in a pipeline safety investigation.

Sec. 118.002.  PIPELINES FOR WHICH PLAN MAY BE REQUIRED. The rules adopted under this chapter may apply to interstate pipelines, intrastate pipelines, portions of pipeline systems the regulation of which the federal government has temporarily delegated to the Railroad Commission of Texas, or gathering lines, and to pipelines for the transportation of any substance or material under the jurisdiction of the commission, as specified by the commission.

Sec. 118.003.  CONTENTS OF PLAN. The rules adopted under this chapter may require that a plan include:

(1)  an identification of risk factors associated with a pipeline system, including population density;

(2)  information about previous inspections and maintenance;

(3)  information about pressure tests;

(4)  information about leaks;

(5)  information about operating characteristics;

(6)  information about corrosion protection methods; and

(7)  other information that may assist the Railroad Commission of Texas in assessing the risk to public health or safety presented by the pipeline.

Sec. 118.004.  APPROVAL OF PLAN. The Railroad Commission of Texas may approve a plan that complies with rules adopted under this chapter.

Sec. 118.005.  CONSEQUENCES OF PLAN APPROVAL. The approval of a plan by the Railroad Commission of Texas does not constitute a certification or representation that the pipeline is in compliance with or exempt from applicable safety standards.

SECTION 54. Subsection (b), Section 101.002, Utilities Code, is amended to read as follows:

(b)  Gas utilities may be [are by definition ] monopolies in the areas they serve. As a result, the normal forces of competition that regulate prices in a free enterprise society may [do ] not operate. Public agencies regulate utility rates, operations, and services as a substitute for competition.

SECTION 55. Subsection (d), Section 101.052, Utilities Code, is amended to read as follows:

(d)  The appearance of the counsellor in a proceeding does not preclude the appearance of other parties on behalf of residential consumers. The counsellor may [not ] be grouped with any other party representing residential consumers.

SECTION 56. Section 102.001, Utilities Code, is amended to read as follows:

Sec. 102.001.  RAILROAD COMMISSION JURISDICTION. (a) The railroad commission has exclusive original jurisdiction over the rates and services of a gas utility:

77th Legislature — Regular Session 76th Day

(1)  that distributes [distributing ] natural gas or synthetic natural gas in:

(A)  areas outside a municipality; and

(B)  areas inside a municipality that surrenders its jurisdiction to the railroad commission under Section 103.003; and

(2)  [. The railroad commission also has exclusive original jurisdiction over the rates and services of a gas utility ] that transmits, transports, delivers, or sells natural gas or synthetic natural gas to a gas utility that distributes the gas to the public.

(b)  The railroad commission has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction as provided by this subtitle.

SECTION 57. Subchapter A, Chapter 102, Utilities Code, is amended by adding Section 102.006 to read as follows:

Sec. 102.006.  POWERS AND DUTIES OF STATE OFFICE OF ADMINISTRATIVE HEARINGS. (a) The utility division of the State Office of Administrative Hearings shall conduct each hearing in a contested case that is not conducted by one or more members of the railroad commission. A hearing must be conducted in accordance with the rules and procedures adopted by the railroad commission. A court reporter appointed by the railroad commission shall transcribe each hearing.

(b)  The railroad commission may delegate to the utility division of the State Office of Administrative Hearings the authority to make a final decision and to issue findings of fact, conclusions of law, and other necessary orders in a proceeding in which there is not a contested issue of fact or law.

(c)  The railroad commission by rule shall define the procedures by which it delegates final decision-making authority under Subsection (b).

(d)  For purposes of judicial review, an administrative law judge's final decision under Subsection (b) has the same effect as a final decision of the railroad commission unless a member of the commission requests formal review of the decision.

SECTION 58. Section 103.001, Utilities Code, is amended to read as follows:

Sec. 103.001.  MUNICIPAL JURISDICTION. To provide fair, just, and reasonable rates and adequate and efficient services, the governing body of a municipality has exclusive original jurisdiction over the rates, operations, and services of a gas utility within the municipality, subject to the limitations imposed by this subtitle, unless the municipality surrenders its jurisdiction to the railroad commission under Section 103.003.

SECTION 59. Subchapter A, Chapter 103, Utilities Code, is amended by adding Section 103.003 to read as follows:

Sec. 103.003.  SURRENDER OF MUNICIPAL JURISDICTION TO RAILROAD COMMISSION; REINSTATEMENT OF JURISDICTION. (a) A municipality may elect to have the railroad commission exercise exclusive original jurisdiction over gas utility rates, operations, and services in the municipality by ordinance or by submitting the question of the surrender of its jurisdiction to the voters at a municipal election.

(b)  The governing body of a municipality shall submit at a municipal election the question of surrendering its jurisdiction to the railroad commission if the governing body receives a petition signed by a number of qualified voters of the municipality equal to at least the lesser of 20,000 or 10 percent of the number of voters voting in the last preceding general election in the municipality.

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(c)  A municipality may not elect to surrender its jurisdiction while a case involving the municipality is pending before the railroad commission.

(d)  A municipality that surrenders its jurisdiction to the railroad commission may reinstate its jurisdiction. The provisions of this section governing the surrender of jurisdiction apply to the reinstatement of jurisdiction.

SECTION 60. Section 104.003, Utilities Code, is amended by adding Subsection (f) to read as follows:

(f)  A capital cost or gas purchase expense is just and reasonable if the capital cost or gas purchase expense is within the range of costs and expenses that would be incurred by a prudent manager at the time and under the circumstances existing at the time the decision to incur the capital cost or gas purchase expense was made.

SECTION 61.  Section 104.107, Utilities Code, is amended by amending Subsection (b) and adding Subsection (c) to read as follows:

(b)  The 150-day period prescribed by Subsection (a)(2) shall be extended for two days for each day the actual hearing on the merits of the case exceeds 15 days.

(c)  If the regulatory authority does not make a final determination concerning a schedule of rates before expiration of the applicable suspension period, the regulatory authority is considered to have approved the schedule. This approval is subject to the authority of the regulatory authority thereafter to continue a hearing in progress.

SECTION 62. Subchapter F, Chapter 104, Utilities Code, is amended by adding Section 104.2551 to read as follows:

Sec. 104.2551.  ELECTRONIC BILLING. A gas utility or municipally owned utility may transmit the utility's bill for services through the Internet or by other electronic means instead of through the United States mail on the request of a customer of the gas utility or municipally owned utility.

SECTION 63. Section 121.103, Utilities Code, is amended by amending Subsection (a) and adding Subsection (d) to read as follows:

(a)  A gas utility that provides gas to a customer does not have an obligation to serve the customer or to maintain the gas supply or physical capacity to serve the customer if the customer:

(1)  is a transportation, industrial, commercial, or other similar large-volume contract customer;

(2)  is an end-use customer of the gas utility;

(3)  reduces or ceases the purchase of natural gas or natural gas service from the gas utility; and

(4)  purchases natural gas or natural gas service from another supplier or purchases an alternate form of energy.

(d)  Notwithstanding Subsection (a), a gas utility that has provided gas to a commercial customer is obligated to serve that customer if the gas utility has a sufficient gas supply and physical capacity to do so without reducing service to its other customers.

SECTION 64. Section 121.2015, Utilities Code, is amended to read as follows:

Sec. 121.2015.  REQUIRED SAFETY RULES. (a) The railroad commission shall adopt rules regarding:

(1)  public education and awareness relating to gas pipeline facilities; and

(2)  community liaison for responding to an emergency relating to a gas pipeline facility.

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(b)  The railroad commission shall require operators or their designated representatives to communicate and conduct liaison activities with fire, police, and other appropriate public emergency response officials. The liaison activities must be conducted by meetings in person except as provided by this section. An operator or the operator's representative may conduct required community liaison activities as provided by Subsection (c) only if the operator or the operator's representative has made the following efforts to conduct a community liaison meeting in person with the officials:

(1)  mailing a written request for a meeting in person to the appropriate officials by certified mail, return receipt requested;

(2)  sending a request for a meeting in person to the appropriate officials by facsimile transmission; and

(3)  making one or more telephone calls or e-mail message transmissions to the appropriate officials to request a meeting in person.

(c)  If the operator or operator's representative cannot arrange a meeting in person after complying with Subsection (b), the operator or the operator's representative shall make the following efforts to conduct community liaison activities by means of a telephone conference call with the officials:

(1)  mailing a written request for a telephone conference to the appropriate officials by certified mail, return receipt requested;

(2)  sending a request for a telephone conference to the appropriate officials by facsimile transmission; and

(3)  making one or more telephone calls or e-mail message transmissions to the appropriate officials to request a telephone conference.

(d)  If the operator or the operator's representative has made the efforts required by Subsections (b) and (c) but has not successfully arranged a meeting in person or a telephone conference, the community liaison information required to be conveyed may be delivered by mailing the information by certified mail, return receipt requested.

SECTION 65. Section 121.206, Utilities Code, is amended by amending Subsection (c) and adding Subsection (d) to read as follows:

(c)  In determining the amount of the penalty, the railroad commission shall consider the guidelines adopted under Subsection (d).

(d)  The railroad commission by rule shall adopt guidelines to be used in determining the amount of a penalty under this subchapter. The guidelines shall include a penalty calculation worksheet that specifies the typical penalty for certain violations, circumstances justifying enhancement of a penalty and the amount of the enhancement, and circumstances justifying a reduction in a penalty and the amount of the reduction. The guidelines shall take into account:

(1)  the person's history of previous violations of Section 121.201 or a safety standard or rule relating to the transportation of gas and gas pipeline facilities adopted under that section, including the number of previous violations;

(2)  the seriousness of the violation and of any pollution resulting from the violation; [and ]

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(3)  any hazard to the health or safety of the public;

(4)  the degree of culpability;

(5)  the demonstrated good faith of the person charged; and

(6)  any other factor the commission considers relevant .

SECTION 66. Subchapter C, Chapter 2003, Government Code, is amended by adding Section 2003.0491 to read as follows:

Sec. 2003.0491.  RAILROAD COMMISSION HEARINGS. The utility division shall conduct contested case hearings and may make final decisions and issue findings of fact, conclusions of law, and other necessary orders in other proceedings on behalf of the Railroad Commission of Texas as provided by Section 102.006, Utilities Code. Section 2003.049 applies to a proceeding under this section except as otherwise provided by Section 102.006, Utilities Code.

SECTION 67. The following laws are repealed:

(1)  Chapter 93, Natural Resources Code;

(2)  Subdivision (2), Section 113.002, and Sections 113.012 and 113.013, Natural Resources Code;

(3)  Subsection (b), Section 113.243, Natural Resources Code, as amended by Section 1, Chapter 496, Acts of the 75th Legislature, Regular Session, 1997; and

(4)  Section 113.246, Natural Resources Code, as amended by Section 6, Chapter 496, Acts of the 75th Legislature, Regular Session, 1997.

SECTION 68. (a) Except as otherwise provided by this Act, this Act takes effect September 1, 2001.

(b)  The changes in law made by this Act relating to the statutory lien on wells apply only to liens on wells for which the Railroad Commission of Texas sends a notice under Section 89.043, Natural Resources Code, as amended by this Act, on or after the effective date of this Act. Liens on wells for which notice is sent before the effective date of this Act are covered by the law as it existed when the notice was sent, and that law is continued in effect for that purpose.

(c)  As soon as practicable on or after the effective date of this Act, the governor, lieutenant governor, and speaker of the house of representatives shall appoint members to the Oil-Field Cleanup Fund Advisory Committee as provided by Section 91.1135, Natural Resources Code, as added by this Act.

(d)  Subchapter L, Chapter 113, Natural Resources Code, as added by this Act, applies beginning with the 2001-2002 school year, and each school district that uses liquefied petroleum gas shall perform pressure tests as required by that subchapter.

(e)  Section 102.006, Utilities Code, as added by this Act, and Section 2003.0491, Government Code, as added by this Act, apply only to a contested case filed at the Railroad Commission of Texas on or after the effective date of this Act. A contested case filed at the commission before that date is governed by the law in effect at the time the case is filed, and the former law is continued in effect for that purpose.

Floor Amendment No. 1

Amend CSSB 310 (House committee printing) as follows:

(1) In SECTION 6 of the bill, in added Section 81.055(a), Natural Resources Code (page 10, lines 4-5), strike "commission shall" and substitute "legislature may".

(2) In SECTION 6 of the bill, in added Section 81.055(b), Natural Resources Code (page 10, line 13), strike "commission" and substitute "legislature".

77th Legislature — Regular Session 76th Day

Floor Amendment No. 2

Amend CSSB 310 on page 10 between SECTIONS 6 and 7 of the bill by inserting the following section, appropriately numbered, and renumbering the subsequent sections accordingly:

SECTION _____. Subchapter C, Chapter 81, Natural Resources Code, is amended by adding Section 81.056 to read as follows:

Sec. 81.056. PIPELINE CONSTRUCTION AND OPERATION PUBLIC NOTIFICATION REQUIREMENTS. (a) Subsections (b) and (c) apply only to a part of a pipeline system that crosses more than three counties for which construction began after September 1, 2001.

(b) A pipeline operator must publish notice in a newspaper of general circulation in each county with a population greater than 10,000 that contains part of the proposed route of the pipeline system. The notice shall be published in the form prescribed by the commission and include the location of the beginning and end points of the proposed part of the system and a listing of each state or federal highway that will be crossed by the proposed part of the system. The notice must be published at least thirty days but no more than one year before the start of construction.

(c) Before approving any permit for the operation of a pipeline required by this chapter or the rules adopted under it, the commission must:

(1) certify that at least ninety days but no more than one year before the date the commission approves the permit the person requesting the permit has provided a copy of the application to:

(A) the county judge of each county that contains part of the proposed route;

(B) the county fire marshal in each county that contains part of the proposed route, if such office has been established by that county; and

(C) the regional water planning group established by Sec. 16.053, Texas Water Code, in each regional water planning area that contains part of the proposed route; and

(2) review and consider comments from members of the public regarding the project for which the permit is being requested.

Floor Amendment No. 3

Amend Floor Amendment No. 2 by Kitchen to CSSB 310 in Subsection (c)(1)(A), Section 81.056, Natural Resources Code, as added by the amendment (page 2, line 2), between "county judge" and "of each county", by inserting "and commissioners".

Floor Amendment No. 4

Amend CSSB 310 (House Committee Printing) as follows:

(1)  In SECTION 9 of the bill, in amended Subsection 85.2021, Natural Resources Code (page 12, line 6), strike "requested" and substitute "required".

(4)  In SECTION 23 of the bill, at the end of added Subdivision (5), Subsection (g), Section 91.142, Natural Resources Code (page 30, line 18), strike "and".

(5)  In SECTION 23 of the bill, in added Subdivision (6), Subsection (g), Section 91.142, Natural Resources Code, between "$1,000" and the period (page 30, line 24), insert the following: ; and

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(7)  for an entity not currently performing operations under the jurisdiction of the commission, $300

(6)  In SECTION 25 of the bill, in added Subchapter O, Chapter 91, Natural Resources Code, between Sections 91.651 and 91.652 (page 31, between lines 26 and 27), insert the following section, renumber the subsequent sections, and correct the cross-references to those sections accordingly:

Sec. 91.652.  PURPOSE. The purpose of the voluntary cleanup program is to provide an incentive to remediate property by removing the liability to the state of lenders, developers, owners, and operators who did not cause or contribute to contamination released at the site covered by the certificate. The program does not replace other voluntary actions and is restricted to voluntary actions.

(7)  In SECTION 25 of the bill, in added Subsection (a), Section 91.660, Natural Resources Code (page 40, line 4), strike "hazardous".

(8)  In SECTION 44 of the bill, in added Subdivision (1), Section 113.351, Natural Resources Code (page 63, lines 16-21), strike Paragraphs (A) and (B) and substitute the following:

(A)  an entity created under the laws of this state and accredited by the Texas Education Agency under Subchapter D, Chapter 39, Education Code;

(B)  a private elementary or secondary school, other than a school in a residence; or

(C)  a state or regional school for the blind and visually impaired or the deaf under Chapter 30, Education Code.

(9)  In SECTION 68 of the bill, in Subsection (d) of the section (page 84, line 11), strike "2001-2002" and substitute "2002-2003".

Floor Amendment No. 5

Amend CSSB 310 (corrected House committee report) by striking SECTIONS 15-19 of the bill (beginning on page 17, line 13, through page 22, line 8), substituting an appropriately numbered new SECTION to the bill to read as follows, and appropriately renumbering subsequent SECTIONS of the bill:

SECTION _____. (a) Section 91.104, Natural Resources Code, is amended to read as follows:

Sec. 91.104.  FINANCIAL SECURITY REQUIRED FOR INACTIVE OPERATORS AND CERTAIN ACTIVE OPERATORS. (a) A person required to file a bond or alternate form of financial security under Section 91.103 who is an inactive operator or who operates one or more land wells and is not involved in any other activities that require the filing of a bond or alternate form of financial security must file a bond, a letter of credit, or a cash deposit at the time of filing or renewing an organization report required by Section 91.142 in an amount equal to:

(1)  $25,000, if the person operates not more than 10 wells;

(2)  $50,000, if the person operates at least 11 but not more than 100 wells; or

(3)  $250,000, if the person operates more than 100 wells.

(b)  In addition to the financial security requirements of Subsection (a), a person required to file a bond or alternate form of financial security under Section 91.103 who operates one or more bay or offshore wells must file the bond, letter of credit, or cash deposit at the time of filing or renewing an organization report required by Section 91.142 in a reasonable amount established by commission rule that exceeds the amount provided by Subsection (a)(1), (2), or (3), as applicable.

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(c)  An operator seeking to assume operatorship of an active or inactive well must file a bond, letter of credit, or cash deposit in the appropriate amount under this section before the commission may approve the transfer of operatorship. A transfer of a well from one entity to another entity under common operatorship is a transfer for purposes of this subsection.

(d)  The bond, letter of credit, or cash deposit amounts prescribed by this section may be used only for actual well plugging and surface remediation. [BONDS AND ALTERNATE FORMS OF FINANCIAL SECURITY. (a) The commission shall require a bond or an alternate form of financial security to be filed with the commission as provided by Subsection (b) of this section.

[(b)  A person required to file a bond under Section 91.103 may choose to file:

[(1)  an individual bond as provided under Section 91.1041;

[(2)  a blanket bond as provided under Section 91.1042;

[(3)  a nonrefundable annual fee of $100, if the person can demonstrate to the commission an acceptable record of compliance with all commission rules, orders, licenses, permits, or certificates that relate to safety or the prevention or control of pollution for the previous 48 months and the person and, if a firm, partnership, joint stock association, corporation, or other organization, its officers, directors, general partners, or owners of more than 25 percent ownership interest or any trustee:

[(A)  has no outstanding violations of such commission rules, orders, licenses, permits, or certificates;

[(B)  has paid all administrative, civil, and criminal penalties, if any, relating to any violation of such commission rules, orders, licenses, permits, or certificates; and

[(C)  has paid all reimbursements of any costs and expenses incurred by the commission in relation to any violation of such commission rules, orders, licenses, permits, or certificates;

[(4)  a nonrefundable annual fee equal to three percent of the bond that otherwise would be required; or

[(5)  to give a first lien on tangible personal property associated with oil and gas production whose salvage value equals the value of an individual bond under Section 91.1041 or the value of a blanket bond under Section 91.1042 that otherwise would be required.

[(c)  A person who chooses to file a form of financial security other than a bond shall also submit a fee of $100 for each application to extend the time to plug a well in accordance with Section 85.2021 of this code. ]

(b)  Section 91.109, Natural Resources Code, is amended to read as follows:

Sec. 91.109.  FINANCIAL SECURITY FOR PERSONS INVOLVED IN ACTIVITIES OTHER THAN OPERATION OF WELLS [DISPOSAL SITE BOND ]. (a) A person applying for or acting under a commission permit to store, handle, treat, reclaim, or dispose of oil and gas waste may be required by the commission to maintain a performance bond or other form of financial security conditioned that the permittee will operate and close the storage, handling, treatment, reclamation, or disposal site in accordance with state law, commission rules, and the permit to operate the site. However, this section does not authorize the commission to require a bond or other form of financial security for saltwater disposal pits, emergency saltwater storage pits (including blow-down pits), collecting pits, or skimming pits provided that such pits

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are used in conjunction with the operation of an individual oil or gas lease. Subject to the refund provisions of Section 91.1091 of this code, proceeds from any bond or other form of financial security required by this section shall be placed in the oil-field cleanup fund. Each bond or other form of financial security shall be renewed and continued in effect until the conditions have been met or release is authorized by the commission.

(b)  In addition to the financial security requirements of Subsection (a) and Section 91.104(b), a person required to file a bond or alternate form of financial security under Section 91.103 who is involved in activities other than the operation of wells must file the bond, letter of credit, or cash deposit at the time of filing or renewing an organization report required by Section 91.142 in an amount equal to:

(1)  $250,000; or

(2)  a lesser amount determined by the commission if the person is able to demonstrate that the risk associated with an operation or group of operations warrants a lesser amount.

(c)  The changes in law made by Sections 91.104(a) and (b) and 91.109, Natural Resources Code, as amended by this section, apply only to a person required on or after September 1, 2004, to file a bond or alternate financial security under Section 91.103, Natural Resources Code. A person required to file a bond or alternate financial security under that section before that date is governed by the law in effect on the date the bond or security is required to be filed, and the former law is continued in effect for that purpose. The changes made by Section 91.104(c), Natural Resources Code, as added by this section, apply on or after the effective date of this Act to a person required by that section to file a bond, letter of credit, or cash deposit.

Floor Amendment No. 6

Amend Floor Amendment No. 5 by Farabee to CSSB 310, in the SECTION of the bill added by the amendment, by striking Subsection (c) of the section (page 4, lines 18-29) and substituting the following:

(c)  This section takes effect immediately if this Act receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this section takes effect September 1, 2001.

(d)  The changes in law made by Sections 91.104(a) and (b) and 91.109, Natural Resources Code, as amended by this section, apply only to a person required on or after the effective date of this section to file a bond or alternate financial security under Section 91.103, Natural Resources Code. A person required to file a bond or alternate financial security under that section before that date is governed by the law in effect on the date the bond or security is required to be filed, and the former law is continued in effect for that purpose. The changes made by Section 91.104(c), Natural Resources Code, as added by this section, apply on or after the effective date of this section to a person required by that section to file a bond, letter of credit, or cash deposit.

77th Legislature — Regular Session 76th Day

Floor Amendment No. 7

Amend CSSB 310 between SECTIONS 10 and 11 of the bill (House Committee Printing page 13, between lines 15 and 16) by inserting the following section, appropriately numbered, and renumbering the subsequent sections accordingly:

SECTION _____. Section 89.011, Natural Resources Code, is amended to read as follows:

Sec. 89.011.  DUTY OF OPERATOR. (a) The operator of a well shall properly plug the well when required and in accordance with the commission's rules that are in effect at the time of the plugging.

(b)  If useable quality water zones are present, the operator shall verify the placement of the plug at the base of the deepest fresh water zone required to be protected. The well is considered to have been properly plugged only when the verification is satisfactory and meets commission requirements.

(c)  If, for the use of the surface owner, the operator of the well plugs the well back to produced fresh water, the duty of the operator to properly plug the well ends only when:

(1)  the well has been properly plugged in accordance with commission requirements; and

(2)  the surface owner has obtained a permit for the well from the groundwater conservation district, if applicable.

(d) Subsections (b) and (c) apply only to wells plugged on or after the effective date of this Act.

(e)  The duty of a person to plug an unplugged well that has ceased operation ends only if the person's interest in the well is sold or conveyed while the well is in compliance with rules of the commission relating to safety or the prevention or control of pollution and the provisions of Sections 89.002(a)(2)(A)-(D) have been met. The person acquiring the seller's interest through such a sale or conveyance succeeds the seller as the operator of the well for the purpose of plugging responsibility once the provisions of Sections 89.002(a)(2)(A)-(D) have been met.

Floor Amendment No. 9

Amend CSSB 310 (House committee printing) as follows:

(1)  In the recitation of SECTION 22 of the bill, between "91.1131" and "and" (page 26, line 24), insert ", 91.1132,".

(2)  In SECTION 22 of the bill, in the heading of added Section 91.1131, Natural Resources Code (page 26, lines 26-27), strike "; PRIORITIZATION OF HIGH-RISK WELLS".

(3)  In SECTION 22 of the bill, in added Section 91.1131(a), Natural Resources Code (page 26, line 27), strike "shall" and substitute "may".

(4)  In SECTION 22 of the bill, in added Section 91.1131(c), Natural Resources Code (page 27, line 16), strike "(c)" and substitute:

Sec. 91.1132.  PRIORITIZATION OF HIGH-RISK WELLS.

Floor Amendment No. 10

Amend CSSB 310 as follows:

(1)  Strike the recital to SECTION 34 of the bill (page 54, line 27 through page 55, line 1, corrected committee report printing), and substitute the following:

"SECTION 34. Section 113.097, Natural Resources Code, is amended by amending Subsections (d) and (h) and by adding Subsection (l) to read as follows:".

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(2)  In Section 113.097, Natural Resources Code, as amended by SECTION 34 of the bill, insert a new Subsection (l) (page 55, between lines 14 and 15, corrected committee report printing), to read as follows:

(l)  Notwithstanding any other provision of this subchapter, a licensee complies with the workers' compensation insurance requirements of this subchapter if the licensee is a client company of a staff leasing services company regulated under Chapter 91, Labor Code, and the staff leasing company obtains workers' compensation insurance coverage under Section 91.042, Labor Code. For purposes of this section, the staff leasing services company and the licensee are co-employers as provided by the Labor Code.

Floor Amendment No. 12

Amend CSSB 310 as follows:

(1) Strike SECTIONS 54 and 55 of the bill (house committee printing, page 75, line 17 through page 76, line 2) and renumber subsequent SECTIONS of the bill appropriately.

(2) In SECTION 57 of the bill, strike the third sentence in added Section 102.006(a), Utilities Code (house committee printing, page 77, beginning at the end of line 3 through line 5).

Floor Amendment No. 15

Amend CSSB 310 in SECTION 59 of the bill, in proposed Section 103.003(c), Utilities Code (House Committee Printing, page 78, line 17), by striking "before the railroad commission".

Floor Amendment No. 17

Amend CSSB 310 by inserting the following new appropriately numbered SECTIONS to the bill and renumbering subsequent SECTIONS of the bill accordingly:

SECTION _____. Subchapter C, Chapter 105, Utilities Code, is amended by adding Section 105.052 to read as follows:

Sec. 105.052.  REIMBURSEMENT OF REASONABLE COSTS. (a) To the extent the regulatory authority determines the costs are reasonable, a gas utility shall reimburse the costs of an affected person or a municipality that is a party to a proceeding that results from a complaint filed against the utility under Section 105.051 to the extent the affected person or party is successful in prosecuting the complaint before a regulatory authority or a court.

(b)  Costs for which an affected person or a municipality may receive reimbursement under this section include any reasonable expenses related to the investigation, preparation, and prosecution of the complaint, including the reasonable costs of consultants, accountants, auditors, attorneys, and engineers.

(c)  For purposes of this section, an affected person or a municipality may recover reasonable costs not yet paid because payment has been deferred pending a determination of reasonableness by the regulatory authority.

(d)  Notwithstanding any other provision of this subtitle, a gas utility may not recover any amounts paid as reimbursement under this section as or through a charge to the utility's customers.

77th Legislature — Regular Session 76th Day

SECTION _____. Section 105.052, Utilities Code, as added by this Act, applies only to a complaint filed with a regulatory authority under Section 105.051, Utilities Code, on or after September 1, 2001.

Floor Amendment No. 19

Amend CSSB 310 by amending SECTION 64 of the bill as follows:

(1) On page 81, lines 1-2, strike "the following efforts" and substitute "an effort".

(2) On page 81, line 3, insert the following after "officials" and before the colon: "by one of the following methods".

(3) On page 81, line 8, strike "and" and substitute "or".

(4) On page 81, lines 14-15, strike "the following efforts" and substitute "an effort".

(5) On page 81, line 16, insert the following after "officials" and before the colon: "by one of the following methods".

(6) On page 81, line 21, strike "and" and substitute "or".

Floor Amendment No. 20

Amend CSSB 310 by adding the following appropriately numbered SECTIONS to the bill, and appropriately renumbering subsequent SECTIONS of the bill:

SECTION _____. The heading to Subchapter J, Chapter 121, Utilities Code, is amended to read as follows:

SUBCHAPTER J. TESTING OF NATURAL

GAS PIPING SYSTEMS

IN SCHOOL [DISTRICT ] FACILITIES

SECTION _____. Subchapter J, Chapter 121, Utilities Code, is amended by adding Section 121.5005 to read as follows:

Sec. 121.5005.  APPLICABILITY. This subchapter applies to a facility of a public elementary or secondary school, including a charter school, or a private elementary or secondary school, but does not apply to a home school.

SECTION _____. Sections 121.501-121.506, Utilities Code, are amended to read as follows:

Sec. 121.501.  DEFINITION. In this subchapter, "supplier" means an individual or company that sells and delivers natural gas to a school [district ] facility. If more than one individual or company sells and delivers natural gas to a school facility [of a school district ], each individual or company is a supplier for purposes of this subchapter.

Sec. 121.502.  DUTY TO PRESSURE TEST. (a) A person responsible for a school facility [Each school district ] shall perform biennial pressure tests on the natural gas piping system in the [each ] school [district ] facility. The [school district shall perform the ] tests must be performed before the beginning of the school year.

(b)  A person responsible for more than one school facility [The school district ] may perform the tests on a two-year cycle under which the person [district ] pressure tests the natural gas piping system in approximately one-half of the facilities each year.

(c)  If the person responsible for [a school district operates ] one or more school facilities operates the [district ] facilities on a year-round calendar, the pressure test in each of those facilities must be conducted and reported not later than July 1 of the year in which the pressure test is performed.

(d)  A natural gas piping pressure test performed under a municipal code satisfies the pressure testing requirements prescribed by this section.

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Sec. 121.503.  REQUIREMENTS OF TEST. (a) The person responsible for a school facility [school district ] shall perform the pressure test to determine whether the natural gas piping downstream of the school facility's [district's ] meter holds at least normal operating pressure over a specified period determined by the railroad commission.

(b)  During the pressure test, each system supply inlet and outlet in the school facility must be closed.

(c)  At the request of a person responsible for a school facility [school district ], the railroad commission shall assist the person [district ] in developing a procedure for conducting the test.

Sec. 121.504.  NOTICE OF TEST. (a) A person responsible for a school facility [school district ] shall provide written notice to the school's [district's natural gas ] supplier specifying the date and result of each pressure test or other inspection.

(b)  The supplier shall maintain a copy of the notice until at least the first anniversary of the date on which the supplier received the notice.

Sec. 121.505.  TERMINATION OF SERVICE. (a) A supplier shall terminate service to a school [district ] facility if:

(1)  the supplier receives official notification from the firm or individual conducting the test of a hazardous natural gas leakage in the facility piping system; or

(2)  [the district fails to perform ] a test or other inspection at the facility is not performed as required by this subchapter.

(b)  A supplier is not liable for any damages that result from a failure to terminate service as required by Subsection (a)(2) for a facility other than a school district facility.

Sec. 121.506.  REPORT OF LEAKAGE [TO BOARD OF TRUSTEES ]. An identified natural gas leakage in a school district facility must be reported to the board of trustees of the district in which the facility is located. An identified natural gas leakage in another school facility must be reported to the person responsible for the school facility.

Floor Amendment No. 21

Amend CSSB 310 between SECTIONS 66 and 67 (House committee printing, page 83, between lines 11 and 12), by inserting the following appropriately numbered SECTION and renumbering the subsequent SECTIONS accordingly:

SECTION _____. (a) Not later than September 1, 2002, the Railroad Commission of Texas shall locate, identify, and inventory by location, type, current use, number, and approximate size all pits and quarries located in this state that are or have been used for the mining or extraction of aggregates, as defined by Section 133.003, Natural Resources Code.

(b)  Notwithstanding Subsection (a), the commission is not required to locate, identify, and inventory pits and quarries that are:

(1)  five acres or smaller; and

(2)  used by a governmental entity for road construction.

(c)  The commission may use aerial photography as one method to identify the pits and quarries.

(d)  Not later than November 1, 2002, the commission shall submit a report detailing its findings under this section to the governor, the lieutenant governor, and the speaker of the house of representatives.

(e)  The commission shall use existing personnel and resources in complying with this section.

77th Legislature — Regular Session 76th Day

Floor Amendment No. 22

Amend CSSB 310 between SECTIONS 66 and 67 (House committee printing, page 83, between lines 11 and 12) by inserting the following appropriately numbered SECTION and renumbering the subsequent SECTION accordingly:

SECTION _____. (a) The Railroad Commission of Texas, in conjunction with the following entities, shall conduct a comprehensive study of the economic effect of fuel ethanol and biodiesel production in this state:

(1)  the Department of Agriculture;

(2)  the state energy conservation office of the office of the comptroller;

(3)  the Texas Department of Economic Development;

(4)  the Office of Rural Community Affairs, if legislation establishing that office is enacted by the 77th Legislature, Regular Session, 2001, and becomes law; and

(5)  the Agriculture Policy Board, if legislation establishing that board is enacted by the 77th Legislature, Regular Session, 2001, and becomes law.

(b)  Not later than January 1, 2003, the Railroad Commission of Texas shall file a report of the study with the governor, the lieutenant governor, and the speaker of the house of representatives.

The amendments were read.

Senator Harris moved that the Senate do not concur in the House amendments, but that a conference committee be appointed to adjust the differences between the two Houses on the bill.

The motion prevailed.

The President asked if there were any motions to instruct the conference committee on SB 310 before appointment.

There were no motions offered.

The President announced the appointment of the following conferees on the part of the Senate on the bill: Senators Harris, Chair; Brown, Sibley, Duncan, and Lucio.

SENATE BILL 305 WITH HOUSE AMENDMENTS

Senator Harris called SB 305 from the President's table for consideration of the House amendments to the bill.

The President laid the bill and the House amendments before the Senate.

Amendment

Amend SB 305 by substituting in lieu thereof the following:

A BILL TO BE ENTITLED

AN ACT

relating to the continuation and functions of the Parks and Wildlife Department.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1.  Section 11.002, Parks and Wildlife Code, is amended to read as follows:

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Sec. 11.002.  POLICY IMPLEMENTATION. The commission shall develop and implement policies that clearly separate the policymaking [respective ] responsibilities of the commission and the management responsibilities of the director and the department staff.

SECTION 2.  Subchapter A, Chapter 11, Parks and Wildlife Code, is amended by adding Section 11.003 to read as follows:

Sec. 11.003.  APPLICABILITY OF CERTAIN STATE LAW REQUIREMENTS. A requirement under state law that a law enforcement agency adopt a policy that requires the collection and reporting of information relating to persons detained during traffic stops, that a peace officer report information relating to persons detained during traffic and pedestrian stops, or that a law enforcement agency compile, analyze, and report information relating to persons detained during traffic and pedestrian stops does not apply to the department or an employee of the department.

SECTION 3.  Section 11.0111, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0111.  SUNSET PROVISION. The Parks and Wildlife Department is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter, the department is abolished September 1, 2013 [2001 ].

SECTION 4. Section 11.012, Parks and Wildlife Code, is amended by adding Subsection (d) to read as follows:

(d)  In making appointments under this section, the governor shall attempt to include persons with expertise in diverse fields, including fields such as historic preservation, conservation, and outdoor recreation.

SECTION 5.  Section 11.0121, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0121.  QUALIFICATIONS. A person may not be [is not eligible for appointment as ] a public member of the commission if the person or the person's spouse:

(1)  is registered, certified, or licensed by a regulatory agency in the field of conservation, outdoor recreation, or commercial fishing, unless the license is a noncommercial hunting or fishing license or a license issued under Subchapter D, Chapter 43;

(2)  is employed by or participates in the management of a business entity or other organization regulated by [the department ] or receiving money [funds ] from the department;

(3) [(2) ]  owns or[, ] controls, [or has, ] directly or indirectly, more than a 10 percent interest in a business entity or other organization regulated by [the department ] or receiving money [funds ] from the department; or

(4) [(3) ]  uses or receives a substantial amount of tangible goods, services, or money [funds ] from the department other than compensation or reimbursement authorized by law for commission membership, attendance, or expenses.

SECTION 6.  Section 11.0122, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0122.  CONFLICT OF INTEREST. (a) In this section, "Texas trade association" means a cooperative and voluntarily joined association of business or professional competitors in this state designed to assist its members and its industry or profession in dealing with mutual business or professional problems and in promoting their common interest.

77th Legislature — Regular Session 76th Day

(b)  A person may not be a member of the commission and may not be a department employee employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.) and its subsequent amendments, if:

(1)  the person is a paid or compensated officer, [An ] employee, or paid consultant of a Texas trade [statewide ] association in the field of conservation, [or ] outdoor recreation, or commercial fishing; or

(2)  the person's [may not be a commission member or employee of the department, nor may a person who cohabits with or is the ] spouse is an officer, manager, [of a managerial employee ] or paid consultant of a Texas trade [statewide ] association in the field of conservation, [or ] outdoor recreation, or commercial fishing [be a member of the commission or an employee of the department grade 17 or over, including exempt employees, according to the position classification schedule under the General Appropriations Act ].

SECTION 7.  Section 11.0123, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0123.  LOBBYIST PROHIBITION [MAY NOT SERVE ON COMMISSION ]. A person may not be a member of the commission or act as the general counsel to the commission or the department if the person [who ] is required to register as a lobbyist under Chapter 305, Government Code, because [by virtue ] of the person's [his ] activities for compensation [in or ] on behalf of a profession related to the operation of the department [commission, may not serve as a member of the commission or act as the general counsel to the commission ].

SECTION 8.  Section 11.0124, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0124.  DISCRIMINATION IN APPOINTMENTS PROHIBITED. Appointments to the commission shall be made without regard to the race, color, disability [handicap ], sex, religion, age, or national origin of the appointees.

SECTION 9.  Section 11.0125, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0125.  REMOVAL OF A COMMISSION MEMBER. (a) It is a ground for removal from the commission that [if a member ]:

(1)  a public member does not have at the time of taking office [appointment ] the qualifications required by Section 11.0121 [of this code for appointment to the commission ];

(2)  a public member does not maintain during [the ] service on the commission the qualifications required by Section 11.0121 [of this code for appointment to the commission ];

(3)  a member is ineligible for membership under [violates a prohibition established by ] Section 11.012(c), 11.0122, or 11.0123 [of this code ];

(4)  a member cannot, because of illness or disability, [is unable to ] discharge the member's [his ] duties for a substantial part [portion ] of the member's term [for which he was appointed because of illness or disability ]; or

(5)  a member is absent from more than half [one-half ] of the regularly scheduled commission meetings that [which ] the member is eligible to attend during a [each ] calendar year without an excuse approved[, except when the absence is excused ] by a majority vote of the commission.

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(b)  The validity of an action of the commission is not affected by the fact that it is [was ] taken when a ground for removal of a commission member exists [of the commission existed ].

(c)  If the director has knowledge that a potential ground for removal exists, the director [he ] shall notify the presiding officer [chairman ] of the commission of the potential [such ] ground. The presiding officer [chairman of the commission ] shall then notify the governor and the attorney general that a potential ground for removal exists. If the potential ground for removal involves the presiding officer, the director shall notify the next highest ranking officer of the commission, who shall then notify the governor and the attorney general that a potential ground for removal exists.

SECTION 10.  Subchapter B, Chapter 11, Parks and Wildlife Code, is amended by adding Section 11.0126 to read as follows:

Sec. 11.0126.  TRAINING PROGRAM FOR COMMISSION MEMBERS. (a) A person who is appointed to and qualifies for office as a member of the commission may not vote, deliberate, or be counted as a member in attendance at a meeting of the commission until the person completes a training program that complies with this section.

(b)  The training program must provide the person with information regarding:

(1)  the legislation that created the department and the commission;

(2)  the programs operated by the department;

(3)  the role and functions of the department;

(4)  the rules of the commission, with an emphasis on the rules that relate to disciplinary and investigatory authority;

(5)  the current budget for the department;

(6)  the results of the most recent formal audit of the department;

(7)  the requirements of:

(A)  the open meetings law, Chapter 551, Government Code;

(B)  the public information law, Chapter 552, Government Code;

(C)  the administrative procedure law, Chapter 2001, Government Code; and

(D)  other laws relating to public officials, including conflict-of-interest laws; and

(8)  any applicable ethics policies adopted by the department or the Texas Ethics Commission.

(c)  A person appointed to the commission is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

SECTION 11.  Subchapter B, Chapter 11, Parks and Wildlife Code, is amended by adding Section 11.0127 to read as follows:

Sec. 11.0127.  TRAINING FOR EMPLOYEES ON STATE INCENTIVE PROGRAM. The director or the director's designee shall provide to agency employees information and training on the benefits and methods of participation in the state employee incentive program under Subchapter B, Chapter 2108, Government Code.

SECTION 12.  Section 11.014, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.014.  PRESIDING OFFICER [CHAIRMAN, VICE-CHAIRMAN ]. (a) The governor shall designate a member [biennially one of the nine members as

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chairman ] of the commission as the presiding officer of the commission to serve in that capacity at the pleasure of the governor [for a term of two years expiring on January 31 of the succeeding odd-numbered year ].

(b)  [The commission shall elect biennially a vice-chairman from among its members for a term of two years expiring on January 31 of the succeeding odd-numbered year.

[(c) ]  A vacancy in the office of presiding officer is filled in the same manner as the original designation [chairman or vice-chairman is filled for the unexpired portion of the term in the same manner as the original appointment or election ].

SECTION 13.  Section 11.0151, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0151.  PUBLIC HEARINGS. (a) In this section, "major decision" means a decision in which a vote is taken on:

(1)  a rule;

(2)  a proclamation;

(3)  a contract;

(4)  a budget;

(5)  a grant;

(6)  a development plan for a geographical area managed by the department;

(7)  a memorandum of understanding with another governmental entity; or

(8)  any other issue as determined by the commission.

(b)  The commission shall develop and implement policies that will provide the public with a reasonable opportunity to appear before the commission and to speak on any issue under the jurisdiction of the commission.

(c)  The commission, or any committee of the commission with at least five commission members serving on the committee, shall provide an opportunity for public testimony in an open meeting before making a major decision.

SECTION 14.  Section 11.0161, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0161.  NOTIFICATION OF COMMISSION ACTIVITIES; COMPLAINTS. (a) The commission shall prepare information of public interest describing the functions of the commission and describing the commission's procedures by which complaints are filed with and resolved by the commission. The commission shall make the information available to the general public and appropriate state agencies.

(b)  The department shall maintain a file on each written complaint filed with the department that the department has the authority to resolve. The file must include:

(1)  the name of the person who filed the complaint;

(2)  the date the complaint is received by the department;

(3)  the subject matter of the complaint;

(4)  the name of each person contacted in relation to the complaint;

(5)  a summary of the results of the review or investigation of the complaint; and

(6)  an explanation of the reason the file was closed, if the department closed the file without taking action other than to investigate the complaint.

(c)  The department shall provide to the person filing the complaint and to each person who is a subject of the complaint a copy of the department's policies and procedures relating to complaint investigation and resolution.

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(d)  The department, at least quarterly until final disposition of the complaint, shall notify the person filing the complaint and each person who is a subject of the complaint of the status of the investigation unless the notice would jeopardize an undercover investigation.

(e)  The commission may adopt rules to define the types of complaints to which this section applies.

SECTION 15.  Subchapter B, Chapter 11, Parks and Wildlife Code, is amended by adding Section 11.0172 to read as follows:

Sec. 11.0172.  LIMIT ON CONTRACTS FOR PUBLICATIONS. (a) In this section:

(1)  "Publication" includes the publication of a book, magazine, photograph, poster, or bulletin.

(2)  "Youth" means an individual younger than 17 years of age.

(b)  The department may not contract with a person regarding a publication unless the contract provides the department the authority to:

(1)  terminate the contract for a violation of a rule adopted under Subsection (c);

(2)  retain final approval over the content of the publication, including advertising; and

(3)  request and receive an appropriate number of copies of the publication that contain advertising that is appropriate for viewing by youth.

(c)  The commission shall adopt rules regarding the types of advertising that are appropriate for viewing by youth.

SECTION 16.  Section 11.0181, Parks and Wildlife Code, is amended by adding Subsection (c) to read as follows:

(c)  The department shall manage the outreach and education activities performed under this section to ensure that the activities:

(1)  are consistent with the department's mission and goals;

(2)  do not duplicate other efforts by the department or other entities;

(3)  provide a cost-effective method for reaching participants; and

(4)  can be effectively measured.

SECTION 17.  Subchapter B, Chapter 11, Parks and Wildlife Code, is amended by adding Section 11.0182 to read as follows:

Sec. 11.0182.  EMPLOYEE FUND-RAISING. (a) The commission by rule shall adopt policies to govern fund-raising activities by department employees on behalf of the department. The rules must:

(1)  designate the types of employees who may solicit donations;

(2)  restrict where and how fund-raising may occur; and

(3)  establish requirements for reports by employees to the director.

(b)  The director shall approve and manage fund-raising activities by department employees on behalf of the department in accordance with commission rules.

SECTION 18.  Section 11.021, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.021.  INFORMATION CONCERNING QUALIFICATIONS AND RESPONSIBILITIES. The director or the director's [his ] designee shall provide to commission members and department employees, as often as [is ] necessary, information regarding the requirements for office or employment [their qualifications ]

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under this chapter, including information regarding a person's [code and their ] responsibilities under applicable laws relating to standards of conduct for state officers or employees.

SECTION 19.  Section 11.022, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.022.  EQUAL OPPORTUNITY EMPLOYMENT. (a) The director or the director's [his ] designee shall prepare and maintain a written policy statement that implements [to assure implementation of ] a program of equal employment opportunity to ensure that [whereby ] all personnel decisions [transactions ] are made without regard to race, color, disability [handicap ], sex, religion, age, or national origin.

(b)  The policy statement must [shall ] include:

(1)  personnel policies, including policies relating to recruitment, evaluation, selection, [appointment, ] training, and promotion of personnel, that show the intent of the department to avoid the unlawful employment practices described by Chapter 21, Labor Code; and

(2)  an analysis of the extent to which the composition of the department's personnel is in accordance with state and federal law and a description of reasonable methods to achieve compliance with state and federal law[;

[(2)  a comprehensive analysis of the department's work force that meets federal or state guidelines;

[(3)  procedures by which a determination can be made of significant underutilization in the department work force of all persons of which federal or state guidelines encourage a more equitable balance; and

[(4)  reasonable methods to appropriately address areas of significant underutilization in the department work force of all persons of which federal or state guidelines encourage a more equitable balance ].

(c) [(b) ]  The policy statement must [statements shall ] be:

(1)  updated annually;

(2)  reviewed by the state Commission on Human Rights for compliance with Subsection (b); and

(3)  filed with the governor's office [not later than November 1 of each year, cover an annual period, and be updated at least annually. The governor's office shall develop a biennial report to the legislature based on the information submitted. The report may be made separately or as a part of other biennial reports made to the legislature ].

SECTION 20.  Subchapter B, Chapter 11, Parks and Wildlife Code, is amended by adding Section 11.0255 to read as follows:

Sec. 11.0255.  EVALUATION OF CONSTRUCTION PROJECTS. (a) The department shall calculate the costs of each department construction project as the project is completed.

(b)  In calculating the costs under Subsection (a), the department:

(1)  shall consider both direct and indirect costs of department employees who perform project tasks; and

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(2)  may use the cost accounting procedures and instructions developed by the State Council on Competitive Government under Section 2162.102, Government Code.

(c)  On request, the State Council on Competitive Government shall provide technical assistance to the department, including assistance with the application of the council's cost accounting procedures and instructions.

(d)  Using the costs calculated under this section for completed projects, the department shall evaluate the costs and benefits of contracting with private entities or individuals to manage proposed construction-related tasks or projects.

SECTION 21.  Section 11.026, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.026.  GIFTS OF PROPERTY OR MONEY. (a) Except as provided by Subsection (b), the [The ] department may accept gifts of property or money in support of any department purpose authorized in this code.

(b)  The department may not accept a gift or other donation from a person who holds a commercial license issued by the department. For the purposes of this section, a license issued under Subchapter D, Chapter 43, is not a commercial license.

SECTION 22.  Section 11.0261, Parks and Wildlife Code, is amended to read as follows:

Sec. 11.0261.  PROHIBITION AGAINST ACCEPTANCE OF GIFTS, GRATUITIES, AND OTHER THINGS OF VALUE; EXCEPTION. (a)  Except as provided by Subsection (b), a [A ] person who is a member of the commission or an employee of the department may not accept a gift, gratuity, or other thing of value, including travel, from a person who:

(1)  is employed by or participates in the management of a business entity or other organization that receives funds from the department;

(2)  owns or controls, directly or indirectly, more than a 10 percent interest in a business entity or other organization that receives funds from the department;

(3)  is a person a significant portion of whose business consists of furnishing goods or services to an entity or organization described by Subdivision (1) or (2); or

(4)  is an agent, representative, attorney, employee, officer, owner, director, or partner of an entity, organization, or person described by Subdivision (1), (2), or (3).

(b)  A department employee may accept reimbursement for travel expenses from the official nonprofit partner designated by the commission under Section 11.205 if:

(1)  the employee has sufficiently documented the expense; and

(2)  the expense arose out of the performance of an activity related to an employee's official duties regarding the partner.

SECTION 23.  Section 11.082, Parks and Wildlife Code, is amended by adding Subsection (d) to read as follows:

(d)  In administering the state plan, the department shall consult with, advise, provide resources to, and otherwise assist local governments regarding aquatic vegetation management and control. In this subsection, "local government" includes any political subdivision with jurisdiction over a public body of surface water.

SECTION 24.  Chapter 11, Parks and Wildlife Code, is amended by adding Subchapter H to read as follows:

77th Legislature — Regular Session 76th Day

SUBCHAPTER H. LAND AND WATER

RESOURCES CONSERVATION PLAN

Sec. 11.101.  DEFINITION. In this subchapter, "conservation" includes the conservation of historical, natural, recreational, and wildlife resources.

Sec. 11.102.  PLAN APPROVAL; HEARING REQUIRED. (a) The department must obtain approval from the commission for each development plan required by statute for a geographical area managed by the department.

(b)  The commission shall hold a hearing on approval of the plan.

Sec. 11.103.  INVENTORY. (a) The department shall inventory all land and water associated with historical, natural, recreational, and wildlife resources in this state that are owned by:

(1)  governmental entities; or

(2)  nonprofit entities that offer access to the land or water to the public.

(b)  The department shall use existing inventory information concerning the lands identified in Subsection (a)(1) whenever possible.

(c)  The department shall create a permanent database of the resources inventoried under Subsection (a). At least once every 10 years, the department shall update the database as necessary to reflect changes in the resources.

Sec. 11.104.  LAND AND WATER RESOURCES CONSERVATION AND RECREATION PLAN. (a) Using the inventory prepared under Section 11.103, the department shall:

(1)  analyze the state's existing and future land and water conservation and recreation needs;

(2)  identify threatened land and water resources in this state; and

(3)  establish the relative importance for conservation purposes of particular resources listed in the inventory.

(b)  Inclusion of specific parcels of land in the inventory shall not constitute any additional right of public access.

(c)  Based on the analysis made under Subsection (a), the department shall prepare a land and water resources conservation and recreation plan. The plan must include criteria for determining how to meet the state's conservation and recreation needs. The department shall revise the plan as necessary to reflect changes in the inventory developed under Section 11.103.

(d)  The department shall modify any existing plans regarding parks and wildlife management areas to make the existing plans consistent with the land and water resources conservation and recreation plan developed under this section.

(e)  The department shall base its decisions regarding the state's conservation needs on the criteria developed in the plan, including decisions relating to:

(1)  the acquisition of new resources for the conservation and recreation purposes of the department;

(2)  the divestiture of existing department-owned resources;

(3)  department grants to local parks;

(4)  department cooperation with private conservation organizations and landowners, including associations of landowners; and

(5)  other major land conservation operations of the department.

Sec. 11.105.  COORDINATION OF CONSERVATION AND RECREATION OPERATIONS. The department shall:

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(1)  consider all resources listed in the inventory prepared under Section 11.103 in conjunction with each other;

(2)  coordinate department activities related to those resources internally and with similar activities of other governmental or nonprofit entities; and

(3)  set priorities for department activities related to those resources according to the most vital existing and future needs for conservation and recreation.

Sec. 11.106.  EXEMPTIONS. Sections 11.104 and 11.105 do not apply to:

(1)  property that is part of a fund created or specifically authorized by the constitution of this state that is administered by or with the assistance of the School Land Board or the General Land Office; or

(2)  land, water, or property owned by the permanent university fund or any other land, water, or property owned by, administered by, or held for the use and benefit of an institution of higher education, as that term is defined in Section 61.003, Education Code.

SECTION 25.  Chapter 11, Parks and Wildlife Code, is amended by adding Subchapter I to read as follows:

SUBCHAPTER I. STATEWIDE COMMERCIAL PROJECTS

Sec. 11.151.  DEFINITION. In this subchapter, "statewide commercial project" means a commercial venture undertaken by the department throughout the state, including promotions, sales, or other activities to raise money for the department. The term does not include a promotion or sale undertaken solely at one site.

Sec. 11.152.  BUSINESS PLANS. Each business plan developed under this subchapter must include:

(1)  a description of the product or service provided;

(2)  an analysis of the information necessary for persons to make decisions on the project;

(3)  an analysis of the personnel necessary to manage and implement the project;

(4)  financial data, including both past performance and a budget and goals for future performance; and

(5)  a list of the resources necessary for a successful project.

Sec. 11.153.  DEPARTMENT PLAN: OPERATIONAL STRATEGIES. (a) The department shall develop an agency-wide business plan to guide its overall operational strategies for statewide commercial projects. The plan must:

(1)  use the plans prepared under Section 11.154 for each project;

(2)  evaluate the efficiency of existing projects;

(3)  consider or propose changes to any project necessary to meet the department's overall goals;

(4)  compare each project's services and products to similar services and products available from the private sector;

(5)  seek to increase savings and improve customer service on each project;

(6)  coordinate existing projects to avoid duplication and focus resources on the most efficient and effective projects; and

(7)  assess the potential for contracting with a private entity or individual to perform department functions relating to specific projects.

(b)  The department shall use the services of the State Council on Competitive Government, where appropriate, in fulfilling the department's duties under Subsection (a)(7).

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Sec. 11.154.  INDIVIDUAL PROJECT PLANS. (a) The department shall develop a business plan for each statewide commercial project. The plan must contain:

(1)  an accurate accounting for all project costs, including personnel and overhead costs; and

(2)  reasonable projections of project income.

(b)  The director shall review the plan for each project at least annually to assess the overall performance and value of the project.

(c)  The department may modify a plan as necessary to meet changing conditions.

Sec. 11.155.  ADJUSTMENT OR TERMINATION OF PROJECT FOR FAILURE TO MEET FINANCIAL OBJECTIVES. (a) Except as provided by Subsection (b), the department shall adjust or terminate a statewide commercial project that fails to meet the financial objectives stated in the project's plan.

(b)  This section does not apply if the department determines that the project possesses a positive public relations value or fulfills a useful educational purpose.

Sec. 11.156.  CONTRACT WITH PRIVATE SECTOR. The department shall consider contracting out all or part of a statewide commercial project to a private entity or individual, including a nonprofit entity or individual.

SECTION 26. Chapter 11, Parks and Wildlife Code, is amended by adding Subchapter J to read as follows:

SUBCHAPTER J. NONPROFIT PARTNERSHIPS

Sec. 11.201.  DEFINITIONS. In this subchapter:

(1)  "Nonprofit partner" means a nonpolitical legal entity that:

(A)  is incorporated under the laws of this state;

(B)  has been granted an exemption from federal income tax under Section 501(c), Internal Revenue Code of 1986, as amended;

(C)  works with the department to further department goals; and

(D)  is selected as provided under Section 11.202.

(2)  "Official nonprofit partner" means the nonprofit partner designated by the commission under Section 11.205.

Sec. 11.202.  GENERAL DUTIES. (a)  The department may select and cooperate with nonprofit partners to serve department goals.

(b)  The department must obtain commission approval for each nonprofit partner selected under Subsection (a).

(c)  The commission by rule shall establish best practices for nonprofit partners to comply with.

Sec. 11.203.  ACCOUNTABILITY OF NONPROFIT PARTNERS; INVESTMENT RESTRICTIONS. (a) The commission by rule shall require a nonprofit partner to comply with specified state standards and safeguards for accounting for state assets held by the nonprofit partner.

(b)  Chapter 2256, Government Code, applies to a nonprofit partner to the extent that the partner controls state money.

Sec. 11.204.  PLAN. The department shall provide to each nonprofit partner a copy of the plan developed under Section 11.104.

Sec. 11.205.  OFFICIAL NONPROFIT PARTNER. (a) The commission shall designate a single nonprofit partner as the official nonprofit partner of the department, unless the commission determines in writing that no nonprofit partner is capable of effectively implementing the goals of this section.

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(b)  The official nonprofit partner must be dedicated to meeting department goals.

(c)  The official nonprofit partner may accept gifts, grants, and donations to further department goals, including a gift, grant, or donation made in the name of the department.

(d)  The official nonprofit partner may use state money to acquire property or engage in construction activities only if that acquisition or construction is consistent with the department's conservation and recreation priorities outlined in the plan developed under Section 11.104.

(e)  The official nonprofit partner may organize and manage accounts for local nonprofit partners or other organizations to benefit a specific state park or other sites under the department's jurisdiction.

(f)  The commission by rule shall establish:

(1)  guidelines under which the official nonprofit partner may solicit and accept sponsorships from private entities; and

(2)  best practices under which the partner may engage in activities under this section.

Sec. 11.206.  AUDIT OF OFFICIAL NONPROFIT PARTNER. (a) The official nonprofit partner shall be audited annually by an independent auditor. The partner shall file the audit with the commission.

(b)  The official nonprofit partner's financial transactions involving and financial records relating to state money held by the nonprofit partner are subject to audit by the state auditor as provided in Section 321.013, Government Code.

Sec. 11.207.  EMPLOYEE BENEFITS. A nonprofit partner may provide money to the department for the department to award, at the department's discretion, to a department employee as a salary supplement, bonus, award, or other benefit, including a scholarship.

Sec. 11.208.  EXPENDITURES; LIMITS. (a) The department shall direct, by the terms of the contract or grant, how a nonprofit partner may spend any state money it receives.

(b)  A state employee may not directly spend or obligate a nonprofit partner's money.

(c)  A nonprofit partner may not spend state money to:

(1)  lobby or otherwise attempt to influence a member of the legislature; or

(2)  directly or indirectly attempt to influence legislation.

SECTION 27.  Section 12.025, Parks and Wildlife Code, is amended to read as follows:

Sec. 12.025.  TECHNICAL GUIDANCE TO LANDOWNERS. (a) The department may provide technical guidance to landowners who request information concerning fish, wildlife, nongame, and habitat management.

(b)  In setting priorities for the provision of money to a landowner under this section, the department shall consider:

(1)  the inventory developed under Section 11.103; and

(2)  the priorities set under Section 11.105.

(c)  The department shall support landowner education programs and cooperate with appropriate state agencies.

(d) [(c) ]  The department shall provide notice of Section 12.0251 to a private landowner who requests technical assistance before entering the property to collect and record information about animal or plant life.

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(e) [(d) ]  The commission by rule shall adopt policies, including written guidelines for a method for providing notice under Subsection (d) [(c) ] and for departmental entry onto privately owned land to collect information described by Section 12.0251(a). The policies and guidelines must identify the maximum information that the department may maintain under Section 12.0251.

(f) [(e) ]  A review or update of a record or plan produced by the department under Section 12.0251 and maintained by the landowner or the landowner's agent may be requested by the landowner or the department.

SECTION 28.  Subsections (a), (b), and (c), Section 13.001, Parks and Wildlife Code, are amended to read as follows:

(a)  Except as otherwise provided by law, the following are under the department's control and custody:

(1)  all recreational and[, ] natural[, and historical ] areas designated as state parks; and

(2)  all historical sites acquired by [are under the control and custody of ] the department.

(b)  The commission shall establish a classification system for state parks and wildlife management areas that categorizes wildlife management areas, parks, or a portion of parks as wildlife management areas, recreational areas, natural areas, or historical sites [areas ]. The commission may not classify a historical site as a historical park.

(c)  The commission shall adopt rules governing the acquisition and development of recreational areas, natural areas, or historical sites [areas ].

SECTION 29.  Section 13.002, Parks and Wildlife Code, is amended to read as follows:

Sec. 13.002.  DEVELOPMENT AND ACQUISITION OF OUTDOOR AREAS [COMPREHENSIVE STATE PLAN ]. The department may:

(1)  [prepare, maintain, and revise a statewide comprehensive plan for the development of the outdoor recreation resources of this state;

[(2) ]  develop, operate, and maintain outdoor areas and facilities of the state; and

(2) [(3) ]  acquire land, water, and interests in land and water for outdoor recreation areas and facilities.

SECTION 30.  Section 13.005, Parks and Wildlife Code, is amended to read as follows:

Sec. 13.005.  ACQUISITION OF HISTORICAL SITES [AREAS ]. (a) The department may acquire by purchase, gift, or other manner historical sites [areas ]:

(1)  where events occurred that represent an important aspect of the cultural, political, economic, military, or social history of the nation or state;

(2)  significantly associated with the lives of outstanding historic persons or with an important event that represents a great ideal or idea;

(3)  embodying the distinguishing characteristics of an architectural type which is inherently valuable for study of a period, style, or method of construction;

(4)  that contributes significantly to the understanding of aboriginal man in the nation or state; or

(5)  that is of significant geologic interest relating to prehistoric animal or plant life.

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(b)  The department shall restore and maintain each historical site [area ] acquired under this section for the benefit of the general public. The department may enter into interagency contracts for this purpose.

(c)  The department shall formulate plans [In formulating a plan ] for the preservation and development of [a ] historical sites. Before formulating a plan for a specific site, the department shall conduct an archeological survey of the site. In formulating plans [area ], the department shall:

(1)  consider the results from the archeological survey for the site if the plan is for a specific site;

(2)  consider the resources necessary to manage a site; and

(3)  meet with and [may ] consider comments [on the plan ] made by the Texas Historical Commission.

(d)  The department and the Texas Historical Commission shall form a joint panel to establish criteria for determining whether a site is of statewide significance under Subsection (a) and to promote the continuity of a historic sites program.

SECTION 31.  Subchapter A, Chapter 13, Parks and Wildlife Code, is amended by adding Sections 13.0051, 13.0052, and 13.0053 to read as follows:

Sec. 13.0051.  COORDINATION WITH TEXAS HISTORICAL COMMISSION; REPORT ON PRESERVATION PLANS. The department shall meet regularly with the Texas Historical Commission regarding plans to preserve and develop historical sites in this state.

Sec. 13.0052.  REPORTS. The department shall periodically prepare reports on plans to preserve and develop historical sites in this state.

Sec. 13.0053.  REFERENCE TO HISTORICAL SITES. (a) In this section, "publication" includes the publication of a book, magazine, photograph, poster, or bulletin.

(b)  The department may not refer to a historical site as a "historical park":

(1)  in a department publication; or

(2)  on a department marker or sign.

SECTION 32.  Section 13.010, Parks and Wildlife Code, is amended to read as follows:

Sec. 13.010.  HISTORIC SITES [LOCATIONS ]. The department may locate, designate, and suitably mark historic grounds, battlefields, and other historic spots in Texas as historic sites. Fitting markers may be erected; however, no expense may be incurred in the name of the state for this project.